Kim Inhwan, CEO of the electronic payment gateway (PG) company Lumen Payments, which caused a payment delay crisis involving 78 billion won, has been sentenced to a heavy prison term in the first trial.
On July 23, the 14th Criminal Division of the Seoul Southern District Court (Presiding Judge Lee Jeonghee) sentenced Kim to 15 years in prison and ordered the forfeiture of 40,840,470,000 won, after he was indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.
The court stated, "The astronomical amount of damages has not been recovered, and innocent investors have suffered losses."
Kim is accused of using a paper company to obtain an advance settlement loan of 72 billion won from the online investment-linked finance company Cross Finance by using fake credit card sales receivables as collateral and embezzling the funds. He is also accused of receiving an additional 6 billion won in advance settlement loans from another company and failing to repay it. Up until August of last year, he allegedly embezzled 40.8 billion won in company funds and failed to pay severance notice allowances and other payments to company employees.
In August of last year, after an arrest warrant was requested for him, Kim fled but was eventually apprehended and detained in Yeongdeungpo-gu, Seoul.
Meanwhile, Seo, who developed the fabricated transaction system that Kim used for the fraud, was sentenced to two years and six months in prison, suspended for four years.
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