“They said they’d supply Market Kurly and Starbucks” ... CEO swindles acquaintances out of 300 million won [Scammers]

[Financial News] A company CEO who borrowed business funds from acquaintances by falsely claiming the company was set to supply its products to 3,000 Starbucks stores was sentenced to prison after failing to repay them. It emerged that the companies the CEO was running at the time had accumulated debts totaling 1.3 billion won and were unable even to pay employees’ wages properly.
According to legal sources on the 26th, the Seoul Northern District Court’s Criminal Division 5 (Judge Kwon So-yong) recently sentenced A, 42, who was indicted on fraud charges, to three years in prison.
A was indicted on charges of defrauding two victims of a total of 300 million won between July 2023 and January 2024.
A approached victim B, saying that the macaron business at the company A ran was booming. A explained that monthly sales of at least 100 million won were expected under a contract with a catering company, and that the company was also set to join the online shopping mall Market Kurly and supply products to 3,000 Starbucks stores. A said money was needed for ingredients to produce the products and promised to repay a loan of 100 million to 200 million won within two to three months.
A received a total of 200 million won in two transfers from B’s side, on July 14 and 21, 2023. Investigators found that A told them the company had agreed to make large-volume deliveries to the catering company and could use the Starbucks logo on its products. A also promised to produce and deliver cookies sold by the victim’s side.
However, according to the facts established by the court, the companies A was running at the time had accumulated overdue utility bills and debts to lending companies amid persistent losses. Their debts totaled about 1.3 billion won, and they were unable to pay employees’ wages properly. Macaron deliveries under the contract with the catering company were also not going smoothly, and there had been no agreement to supply products to 3,000 Starbucks stores.
The court found that A had planned to use the borrowed money not for product costs but to repay existing debts, pay employees’ wages and cover other expenses. It therefore concluded that A had neither the intention nor the ability to repay the money within the promised period or deliver the ordered products on time, even if the money was lent.
A later borrowed money from another victim, C, a fellow student at a graduate school of business. In December 2023, A sent C a photo of a commercial lease agreement and said the money was needed for a proof-of-balance certificate, promising to return it the next day if C transferred 100 million won. However, investigators found that A actually planned to use the money to repay existing debts and cover living expenses, and had no intention or ability to return it at the promised time.
During the trial, A argued that there had been no intent to defraud in connection with some of the charges. However, the court rejected the claim, finding intent to defraud based on a comprehensive review of the victims’ statements, the state of the businesses A operated and A’s financial circumstances.
The court criticized A, saying the offense was serious. Judge Kwon noted, “The total amount taken from the victims was 300 million won, a substantial sum, and the losses have yet to be properly recovered. The victims have not forgiven the defendant either.” Judge Kwon added, “I also took into account the fact that the defendant absconded during the trial when determining the sentence.”
[email protected] Seo Ji-yoon Reporter