Saemaeul Geumgo Employees Embezzling 4 Billion Won in Loan Fees Sentenced to Prison in Second Trial

Former and current employees of Saemaeul Geumgo, who were prosecuted for embezzling approximately 4 billion KRW in fees from real estate project financing (PF) loans, were sentenced to prison terms in the second trial following the first trial.

A Saemaeul Geumgo branch in downtown Seoul. [Image source=Yonhap News]

According to the legal community on the 29th, the Criminal Division 3 of the Seoul High Court (Presiding Judges Lee Chang-hyung, Nam Ki-jung, Yoo Je-min) sentenced Park Mo (40), former deputy manager in charge of credit operations at Saemaeul Geumgo Central Association, and No Mo (44), former credit team leader at Branch A, who were indicted for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust), to 7 years and 5 years in prison respectively, the same as in the first trial.

However, Oh Mo (44), credit team leader at Branch B, who was also indicted, was sentenced to 2 years in prison with a 3-year probation, a reduced sentence compared to the first trial (2 years imprisonment).

They are accused of lowering the interest rates and loan handling fees received by the loan syndicate (major lenders) during the Saemaeul Geumgo PF loan process from December 2021 to September 2022, and embezzling the difference of 3,969,400,000 KRW under the pretext of consulting fees.

When Park proposed the crime to No and Oh, they each established consulting firms under their wives' names and embezzled the fees. In real estate PF loans, the loan syndicate receives loan interest rates and handling fees through brokerage institutions such as securities firms, and No and Oh exploited their positions to determine the scale of these fees at their respective branches.

The court stated, "The original judgment is just and there is no error in fact-finding or legal interpretation," adding, "However, Oh was given leniency as he participated in the crime only twice and the breach of trust gains were relatively minor."

The court further said, "The defendants abused the fact that loan conditions are determined solely by loan officers to appropriate profits that should have gone to the loan syndicate, which is a very serious offense warranting sincere reflection," but also noted, "Nevertheless, they claim that the prosecution and the original trial erred by misunderstanding financial consulting design and wrongly concluding breach of trust."