‘Embezzlement of Company Funds’ Kim Jaehyun, Former Optimus CEO, Sentenced to 3 Years in Prison in Appeal Trial

Court: "Embezzled funds used to cover fund redemption payments"
Former CEO Kim sentenced to 40 years for 13 trillion won fund fraud

Kim Jae-hyun, former CEO of Optimus Asset Management, who was sentenced to 40 years in prison for a fund fraud involving 1.3 trillion won, was sentenced to an additional 3 years in prison in the second trial for charges of embezzling company funds.

The Seoul High Court Criminal Division 6-3 (Presiding Judges Lee Eui-young, Won Jong-chan, Park Won-cheol) sentenced Kim to 3 years in prison on the 25th for violating the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement) and other charges. The first trial sentenced Kim to 5 years in prison.

The second trial court acknowledged all the charges that were found guilty in the first trial. However, it stated the reason for the reduced sentence, saying, "It appears that most of the embezzled funds were used to cover redemption payments for the victims of the fraud, and consideration must be given to fairness if the judgment had been made simultaneously with the case for which the sentence was already finalized."

Kim is accused of withdrawing 5 billion won from the paid-in capital increase funds deposited by Hwaseong Industrial, the largest shareholder of Haeduck Powerway, an affiliate of Optimus, together with former CEO Park of Haeduck Powerway in May 2020, and arbitrarily using it for the redemption of Optimus funds. He is also accused of using about 13 billion won of Haeduck Powerway's loans for the redemption of Optimus funds.

The first trial sentenced him to 5 years in prison, stating, "He committed the crime knowing the situation of Haeduck Powerway, which desperately needed Hwaseong Industrial's capital, and considering the scale of embezzlement and the damage suffered by Haeduck Powerway shareholders due to the crime, the culpability is heavy."

Previously, Kim was sentenced to 40 years in prison for fraud related to the so-called ‘Optimus Fund Redemption Scandal,’ in which he deceived investors by claiming to invest in public institution sales receivables and embezzled 1.3 trillion won.