[Asia Economy Reporter Hwang Seoyul] A group accused of deceiving about the possibility of constructing a regional housing cooperative apartment in Guro-gu, Seoul, and embezzling approximately 24 billion KRW from over 400 people was sentenced to heavy penalties in the first trial.
On the 15th, the 13th Criminal Division of the Seoul Southern District Court (Chief Judge Lee Sangju) sentenced Ryu Mo (60), former CEO of the Guro Regional Housing Cooperative’s former business agency, to 30 years in prison and ordered a fine of 6.2 billion KRW. Additionally, Lee Mo (80), who served as the former promotion committee chairman, was sentenced to 12 years in prison and fined 5.5 million KRW. The court also ordered Ryu and Lee to pay 50 million KRW in compensation to the plaintiffs. Han Mo (59), CEO of a sales consulting company, was sentenced to 7 years in prison. Many victims gathered to witness the verdict, creating a long waiting line in front of the courtroom.
The court recognized the fraud charges, stating, "The defendants deceived over 400 people and embezzled about 20.6 billion KRW in cooperative membership deposits." Regarding breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, the court acknowledged charges including changing the payment criteria in the land purchase service contract to excessively pay commissions, disguising land purchase agreements to pay landowners, and forcing cooperative members to bear approximately 5 million KRW in attorney fees related to Lee’s criminal case.
The court explained the sentencing rationale: "Considering the economic circumstances and situations of the victims who prepared the cooperative membership fees through earned income or loans, the crime is very serious to the extent that it plunged the victims’ fate and future into ruin. Despite victims expressing financial losses, frustration, loss, and mental shock and pain, there was little effort to restore the damages."
It was also taken into account that Ryu planned and played a leading role in the entire case, Lee, as the promotion committee chairman, betrayed the trust of cooperative members despite the obligation to execute funds properly, and Han specifically carried out deceptive acts while managing the sales consultation organization.
They were indicted on charges of embezzling a total of 23.9 billion KRW in deposits from 477 victims by promoting from November 2016 to September 2019 that apartment move-in would be possible in 2021 after securing 60-80% of land use rights. However, investigations revealed that the actual land secured was only 20-30%. To obtain approval for establishing a regional housing cooperative, more than 80% of the housing construction site area’s land use rights must be secured.
After the verdict, the Guro Regional Housing Cooperative Emergency Countermeasures Committee, composed of victims, issued a statement in front of the Southern District Court. Ha Yongyoung, chairman of the emergency committee, said, "As one of the victims, I sincerely thank the presiding judge for conducting a focused trial over one year and two months and express respect for the strict verdict. I believe that the current laws related to regional housing development methods must be changed, and if changing them is difficult, they should be abolished."
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