Hyosung Vice Chairman Lee Sangwoon Given Final Suspended Sentence for Accounting Fraud and Tax Evasion
Two Years and Six Months in Prison, Four-Year Suspension Confirmed
Case Concludes 12 Years After Indictment
Lee Sangwoon, Vice Chairman of Hyosung Group, has received a final suspended prison sentence for involvement in corporate crimes.
On September 10, the Supreme Court's second division (Presiding Justice Eom Sangpil) upheld the appellate court's verdict sentencing Vice Chairman Lee, who was indicted for violating the Act on the Aggravated Punishment of Specific Crimes (Tax Evasion), to two years and six months in prison with a four-year suspension. The ruling deferring the imposition of a fine and acquitting him of charges regarding the 2008 corporate tax evasion was also maintained.
Vice Chairman Lee was indicted in January 2014 alongside the late Cho Suckrai, Honorary Chairman of Hyosung Group, on charges of embezzlement, breach of trust using overseas paper companies, accounting fraud, and corporate tax evasion. At the time, prosecutors alleged that they embezzled 6.98 billion won from Hyosung’s overseas subsidiaries via a Hong Kong paper company and caused the company losses of 2.33 billion won by canceling a loan liability of the Hong Kong paper company using funds from Hyosung's Singapore subsidiary. In addition, they were accused of evading 123.7 billion won in corporate tax through 501 billion won of accounting fraud over ten years from 2003, and concealing 11 billion won in capital gains tax and other taxes through trading billions of won worth of stocks under borrowed names.
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Both the court of first instance and the appellate court prior to remand sentenced Vice Chairman Lee to two years and six months in prison with a four-year suspension. The Supreme Court subsequently remanded part of the case, finding errors in the lower court’s judgment regarding the 2008 corporate tax evasion. After the remand, the Seoul High Court acquitted him of part of the corporate tax evasion charges but still sentenced him to the same two years and six months in prison with a four-year suspension as the prior appellate court.
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