'Planned Real Estate' Embezzled 130 Billion Won Claiming Development Restriction Zone Benefits... Acquitted in First Trial

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The CEO and branch manager of a “planned real estate” company, who deceived people by making it seem like there were benefits to undevelopable forest land and embezzled 130 billion won, were acquitted in the first trial.

On the 17th, Judge Choi Seon-jae of Criminal Division 13 at the Seoul Northern District Court acquitted four people, including the CEO and branch manager of the planned real estate company, who were indicted on charges of fraud and violation of door-to-door sales business laws.

It was investigated that the four officials of the planned real estate company purchased forest land in a development-restricted zone from July 2017 to December 2020 and sold it in the form of shared ownership to about 10,000 people. Through this, they earned a profit of 130 billion won. Additionally, they reportedly hired a large number of telemarketers to approach victims and recommended real estate transactions by splitting shares.

However, the court ruled, “The victims did not receive direct explanations about the land sold from the defendants but heard exaggerated or false explanations from salespeople,” and “It is difficult to conclude that the defendants instructed the salespeople to engage in deceptive acts or tacitly conspired with them knowingly.”

The court also found that the defendant group did not constitute a multi-level organization as defined by door-to-door sales business laws. The court explained, “Most of the salespeople of the defendant company appear to have been employed after seeing personal advertisements posted by the company,” and “Although a recruitment system was operated, new participants likely could not join as subordinate participants.”

However, the court pointed out that the defendants’ sales method practically created an environment that forced salespeople to compete and pressured them with performance demands, which could be problematic in the future.