Prosecution to Recover Criminal Proceeds from Major Economic Offenders Including Osstem Implant Embezzlement

44 Billion KRW in Assets Under Borrowed Names
Civil Lawsuits Filed in Lime and Merge Point Scandals

The prosecution has launched efforts to recover criminal proceeds from major economic offenders, including those involved in the Osstem Implant embezzlement case and the Lime Asset Management scandal.

Lee, accused of embezzling 221.5 billion KRW from Osstem Implant, is being transferred from Gangseo Police Station in Seoul to the prosecution on the 14th. Photo by Kang Jinhyung aymsdream@

The Criminal Proceeds Recovery Team of the Seoul Southern District Prosecutors' Office, led by Chief Prosecutor Choi Seonkyung, announced on the 20th that it had filed 19 subrogation lawsuits to recover high-value forfeiture orders from major economic offenders, such as those in the Osstem Implant embezzlement case, the Lime scandal, and the Merge Point incident. These lawsuits target approximately 4.4 billion KRW in assets hidden under the names of family members or acquaintances.

A subrogation lawsuit is a legal action in which a creditor exercises the debtor's rights on behalf of the debtor, in order to secure the debtor's assets. Despite the court's guilty verdicts and final forfeiture orders, the execution of forfeiture was hindered because the assets were registered under different names. In response, the prosecution filed civil lawsuits regarding these assets. This means the prosecution exercised rights over assets concealed under the names of family members and acquaintances, which should have been forfeited from major economic offenders.

For example, the prosecution filed lawsuits totaling 1.3 billion KRW to recover assets registered under the names of the younger sibling and spouse of Lee, the former head of finance at Osstem Implant, who was sentenced to 35 years in prison and a forfeiture order of 91.7 billion KRW for embezzling 221.5 billion KRW from the company.

The prosecution believes that Lee donated land and a building in Paju, Gyeonggi Province, worth approximately 1.185 billion KRW, to his younger sister. When the stocks Lee had invested in with the embezzled funds plummeted, making it difficult to recover the money, he is believed to have set up a nominee trust to evade forfeiture. As a result, the prosecution filed a lawsuit against his sister to cancel the registration of ownership transfer for the land and building. In addition, Lee was found to have transferred ownership of land in Buan, North Jeolla Province, worth about 64.8 million KRW, to his spouse. The prosecution also filed a claim to terminate the nominee trust and to recover the purchase funds for this land.

For Kim Bonghyun, the former chairman of Star Mobility and a key figure in the Lime scandal, who was sentenced to 30 years in prison and a forfeiture order of 77 billion KRW for embezzling 103.3 billion KRW in company funds, the prosecution filed lawsuits totaling 700 million KRW to recover assets registered under the names of acquaintances and others. Kim was found to have placed real estate and movables worth about 670 million KRW, including an officetel in Gwangsan-gu, Gwangju, which he purchased with criminal proceeds, in the name of his common-law spouse.

The prosecution also filed a lawsuit for 2.4 billion KRW to recover assets registered under a company established by Kwon Bogun, the former Chief Strategy Officer of Merge Plus, who was sentenced to eight years in prison and a forfeiture order of 5.3 billion KRW for misappropriating 251.9 billion KRW in 'Merge Money' sales proceeds from 560,000 victims in the Merge Point incident. The prosecution also filed a claim for the assignment of a lease deposit receivable worth 720 million KRW concerning a real estate lease contract under the name of a corporation established for the crime. Furthermore, the prosecution filed a claim for the assignment of a deposit receivable worth 1.65 billion KRW under the name of the same corporation.

A prosecution official stated, "We will thoroughly recover criminal proceeds to ensure that criminals gain no benefit from their crimes and will do our utmost for the swift recovery of damages."