sabiz

The CEO of P2P (peer-to-peer) company 'TopFund,' who was involved in an investment fraud scheme amounting to over 100 billion won, has received a confirmed prison sentence.

According to legal sources on the 1st, the Supreme Court's first division (Chief Justice Seok Kyung-hwan) confirmed the original sentence of 6 years and 9 months in prison for Lee (the CEO) who was indicted on charges of fraud and other offenses, and imposed a fine of 20 million won on TopPlatform Inc.

The Supreme Court stated, "The original judgment did not violate the rules of logic and experience, nor did it exceed the limits of free evaluation of evidence or misinterpret the law."

Lee was indicted for defrauding 1288 investors out of approximately 11.6 billion won between January and August 2020.

He had misled investors into believing that by lending money to other companies for marketing and new product purchasing funds, they would receive a 17% annual return along with the principal. However, the funds raised were instead used to repay other loan products, a practice known as "Ponzi scheme."

The prosecution also applied charges of violating the Unlicensed Fundraising Act, believing that Lee promised full repayment of the principal without permission and raised funds from unspecified individuals.

During the trial, Lee admitted to the fraud charges but denied the violation of the Unlicensed Fundraising Act, claiming he never promised to guarantee the principal.

However, both the first and second trials found him guilty on all charges. The first trial sentenced him to 7 years in prison, while the second trial reduced the sentence to 6 years and 9 months, taking into account that he was separately convicted of similar crimes.

In the first trial, the court determined that Lee had promised principal repayment based on his promotional statements, such as "The company has a payment guarantee contract with a reputable company," and "If the debt is unpaid, a payment guarantee can be requested to repay the investment."

The first trial also highlighted, "P2P lending involves small investments by the general public and is part of 'community finance.' The crime not only caused harm to many victims but also severely damaged the public's trust in financial transactions."

Despite Lee's appeal, the Supreme Court upheld the original ruling and rejected the appeal.