30s Sentenced to Prison for Embezzling 5 Billion Won from Customers Using "Half-Price Car Lease" Bait

Invested Down Payments in Acquaintance's Business, Leading to Losses
Offered Unprecedented Terms and Used Customer Funds for a Ponzi-like Scheme

The representative of a vehicle leasing brokerage company, who collected tens of billions of won nationwide by claiming that customers could use vehicles at half price if they paid the car lease down payment in advance, was sentenced to prison.

The Criminal Division 22 of Cheongju District Court (Presiding Judge Oh Sang-yong) sentenced Mr. A, a man in his 30s, the company representative who was prosecuted on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violation of the Act on the Regulation of Conducting Fund-Raising Business Without Permission, to 3 years and 6 months in prison, according to Yonhap News on the 24th.

Mr. A was charged with embezzling about 5 billion won from approximately 100 corporate and individual customers nationwide, including Seoul, Busan, and Cheongju, between March 2019 and September 2021 under the pretext of car lease down payments. In 2015, he established a vehicle lease brokerage company in Cheongju that connected customers who needed vehicle leases with lease companies and received brokerage fees.

Cheongju District Court Exterior View

Mr. A attracted customers by offering an unprecedented condition of returning 60-70% of the vehicle down payment and 40-50% of the monthly lease fees, then expanded his business nationwide. However, he invested the down payments (about 30% of the vehicle price) received from customers into a solar power business run by his acquaintance Mr. B. When Mr. B was arrested in February 2019 on charges of investment fraud and the principal recovery became difficult, Mr. A resorted to a so-called 'Ponzi scheme' by using down payments from new customers. Eventually, Mr. A was prosecuted for failing to return the promised down payments to customers whose contract periods had ended.

The court pointed out, "The defendant concealed the fact that he was making repayments in a Ponzi-like manner and deceived the victims by pretending to operate the business normally, embezzling more than 5 billion won," and described the crime as having a bad nature. Regarding the sentencing, the court explained, "Although the defendant entered into contracts while at least implicitly aware that repayment of down payments was impossible and has not been forgiven by the victims, the sentence was determined considering that a significant portion of the embezzled money was used to repay other customers' down payments and that some victims reached settlements."