Hustem Korea CEO Lee Sang-eun Released After 5 Months... Under Conditions Including Electronic Monitoring (Comprehensive)

Suspicion of 1 Trillion Won Ponzi Scheme
Fundraising Prohibited Under Conditions
Court Approval Required for Corporate Asset Disposal

Lee Sang-eun, CEO of Huestem Korea, who is suspected of a 1 trillion won-scale illegal multi-level marketing fraud, will be released on bail. It has been about five months since he was detained last December on charges of violating the Act on Door-to-Door Sales, etc.

[Image source=Asia Economy DB]

The Criminal Division 31 of the Seoul Central District Court (Chief Judge Park Jun-seok) accepted Lee's bail request on the 29th. The bail bond is 50 million won, which will be replaced by a surety insurance policy. Accordingly, Lee will stand trial while not in detention.

However, the court imposed conditions including the attachment of an electronic device to restrict residence and outings, and mandatory attendance at court hearings. All fundraising activities aimed at obtaining money or other property benefits are also prohibited. Furthermore, only preservation acts are allowed for all assets owned by any corporations he owns, and any management acts including disposal of assets require court approval.

Previously, Lee was arrested and indicted in January on charges of violating the Act on Door-to-Door Sales, etc., and was undergoing trial, but his bail application was rejected once on March 18.

Subsequently, Lee applied for bail again on the 9th of this month, and this time the court approved it.

Some view that the court granted bail with conditions on residence and outing restrictions considering the expiration of Lee's detention period. Under the current Criminal Procedure Act, the maximum detention period for a defendant in the first trial is six months. Lee was detained in early December last year, so the detention period will expire next month.

Huestem Korea is accused of disguising transactions of agricultural, livestock, and marine products through a multi-level marketing-like organization and embezzling more than 1.19 trillion won from 100,000 people under the pretext of membership fees.

Victims claim that the corporation promoted digital assets inflated by 2.6 times the invested amount as dividends, which could be converted into cash or used to purchase agricultural products, thereby attracting investors.

Separately, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency is investigating Huestem Korea on charges of fraud and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission. Initially, the case was handled by the Seocho Police Station in Seoul, but for a swift investigation, the investigation was recently reassigned to the Financial Crime Investigation Unit at the Seoul Metropolitan Police Agency as the dedicated investigation office.