Former Executive of Gyeongnam Bank Embezzling 300 Billion Won Sentenced to 35 Years in Prison... "Severe Crime"

1st Trial Court: "Trust in the Financial System Collapsed"

A former executive of BNK Gyeongnam Bank, who embezzled more than 300 billion won of company funds, was sentenced to a heavy prison term in the first trial.

The Seoul Central District Court Criminal Division 23 (Presiding Judge Oh Se-yong) sentenced Lee Mo (52), former head of the Investment Finance Department at Gyeongnam Bank, who was charged under the Act on the Aggravated Punishment of Specific Economic Crimes, to 35 years in prison on the 9th. A fine of approximately 15.9 billion won was also ordered. Hwang Mo (53), a former employee of Korea Investment & Securities who assisted Lee in committing the crime, was sentenced to 10 years in prison and fined about 1.1 billion won.

[Image source=Yonhap News]

The court stated, "From 2008 to 2022, over a long period of about 14 years, the defendant repeatedly committed embezzlement, with the total amount embezzled reaching 308.9 billion won. The methods and nature of the crime are extremely serious, involving forgery of private documents and use of nominee accounts." It added, "The crime has adversely affected the trust of all financial institutions and their employees, and it is expected to take considerable time to restore the collapsed trust in the financial system." The court also noted, "Gyeongnam Bank suffered a loss of 59.2 billion won, and its external credibility has declined, making it difficult to fully recover the damage."

Lee and Hwang are accused of forging and using withdrawal slips 20 times from November 2014 to July 2022 to send 228.6 billion won of company funds to paper companies and use them at their discretion. Lee is also charged with embezzling 80.3 billion won of company funds alone using the same method from July 2008 to September 2018.

The two were investigated for embezzling loan funds by impersonating employees of the developer and creating false documents to request loans, or by diverting loan principal and interest repayment funds sent by trust companies and others to Gyeongnam Bank accounts in the developer’s name at the developer’s request. Previously, Lee’s wife, who concealed the embezzled funds, and Lee’s older brother, who helped with money laundering, were each sentenced to 1 year and 6 months in prison. Seven accomplices who assisted Lee in money laundering were all sentenced to prison terms in the first trial.