Former Star Mobility chair gets 30 years for embezzlement

Kim Bong-hyun, the former chairman of Star Mobility at the center of a massive financial fraud, was sentenced to 30 years in prison by a Seoul court Thursday for embezzlement.

The Seoul Southern District Court ruled that Kim had violated the Act on the Aggravated Punishment of Specific Economic Crimes by embezzling over 125.8 billion won ($99 million). It also fined him 76.93 billion won.

The court said it determined that “severe punishment is necessary because Kim tried to evade his criminal responsibility by running away before the sentencing” and also based on the severity and degree of damages incurred by the economic crime.

The sentencing comes around two years and nine months after he was first indicted in May 2020.

Kim is a suspect in a financial fraud scandal surrounding Lime Asset Management which resulted in total damages amounting to nearly 1.7 trillion won in 2019.

Investors suffered major losses when Lime Asset Management suspended fund redemption and allegedly tried to cover this up. The hedge fund was allegedly involved in a Ponzi scheme to cover up its losses and sold products to customers without providing adequate information to assess the risks involved.

Star Mobility, a small industrial robot manufacturer, is alleged to be the main financial resource for Lime.

In November last year, Kim cut off his ankle monitor and fled ahead of his final court hearing. He was caught 48 days later in an apartment in Hwaseong, Gyeonggi.

Kim had been released on bail in July 2021 on the condition that he wears an electronic tracking device.

Last month, prosecution requested a 40-year jail sentence for the “worst case of a criminal escape.”

Kim is also accused of extortion and bribery that involves politicians and former Blue House officials.

The court on Thursday found him guilty of embezzlement, including 40.07 billion won in Lime Asset funds invested in Star Mobility and 37.74 billion won from a veterans affairs association. The money was siphoned off through shell companies, and some of it was used to pay his own debts.

Kim was acquitted on violations of the Political Fund Act, as the court said it didn’t find enough evidence.

The president judge said that Kim “not only meticulously planned the crime and played a leading and key role, but also seems to have spent most of the amount for personal purposes.”

BY SARAH KIM [[email protected]]