The CEO of the development company, accused of embezzling funds from the hotel construction project at Hapcheon Video Theme Park in Gyeongnam, has been sentenced to 10 years in prison.
The Criminal Division 1 of the Geochang Branch of the Changwon District Court (Presiding Judge Kim Byungguk) sentenced Mr. A to 10 years in prison on the 20th for breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.
The nominal CEO, Mr. B, and Vice President, Mr. C, who were tried together on the same charges, were each sentenced to 2 years and 6 months in prison, but were not taken into custody in court.
Previously, the prosecution had requested 10 years and 6 months for Mr. A, and 7 years each for Mr. B and Mr. C.
According to the court, they were indicted on charges of inflating project costs or submitting false business plans after signing an agreement with Hapcheon County for the construction of accommodation facilities within Hapcheon Video Theme Park, thereby obtaining project funds and using them for other purposes.
The Hapcheon Video Theme Park accommodation project involved building a 200-room hotel on a 1,607-square-meter site within the Yongju-myeon theme park. The land was provided free of charge by Hapcheon County, and the developer was to build the hotel and donate it to the county, while retaining hotel operation rights for 20 years as a profit-oriented private investment project.
The construction was to be funded with 4 billion KRW invested by the developer and the remaining 55 billion KRW borrowed through real estate project financing (PF). However, Mr. A embezzled 25 billion KRW from the PF funds and disappeared, causing the project to halt and ultimately collapse.
It was revealed that Mr. A used 17.7 billion KRW of the embezzled funds to repay debts or for company operating expenses.
The court stated, "The defendant used his acquaintance with public officials to propose the necessity of building the hotel and signed the agreement, but did not begin construction for a year. As a result, the project was halted and lawsuits regarding the damages are ongoing, but the defendant has made no effort to compensate the victims, necessitating a severe punishment."
Recently, nine individuals including landscaping company CEO Mr. B, who participated in the case, were referred to the prosecution without detention on charges of breach of trust, and four current and former Hapcheon County officials including Mr. C were referred on bribery charges, bringing the total number of people involved in the case so far to 17.
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