The founder of the coffeehouse chain Caffe Bene, who was indicted on charges of swindling billions of won in investment funds from building owners under the pretext of pursuing a nursing home business, has been sentenced to prison in the first trial.

The 29th Criminal Settlement Division of the Seoul Central District Court (Presiding Judge Eom Gi-pyo) sentenced Kim, the founder who was indicted on charges including fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, to three years in prison on the 22nd.

However, the court did not place Kim under court custody to provide an opportunity to reach a settlement with the victims.

The court acknowledged the charges that Kim, the actual operator of business entities such as Amor Fati Silver Care, recruited building owners as investors while pushing forward with the nursing home project and swindled a total of 18 investors out of investment funds ranging from over 100 million won to 6.6 billion won under the guise of land purchase contract deposits.

The total amount of damages was estimated at around 30 billion won.

The court determined that even under circumstances where financial conditions had deteriorated, Kim shifted the damages resulting from construction delays onto the investors through a so-called "Ponzi-like rollover" method without establishing a concrete financing plan.

The court pointed out, "Even from the time the construction contracts were signed, the likelihood of completing the construction as promised was extremely low, yet funds were received without any rational plans," adding, "Some of the funds were used to pay credit card bills or vehicle lease fees, or were deposited into securities accounts under employee names."

The court also found Kim guilty of embezzlement charges for transferring company funds to accounts under family names to use for real estate purchases and stock investments, as well as breach of trust charges for acquiring financial gains by disposing of land slated to be handed over to victims to another company.

The court rebuked, "Kim deceived the victims and swindled billions of won, including land-backed loans," and added, "Most of the victims of the fraud crimes are demanding strict punishment without having settled with Kim."

However, the court stated that the sentence was determined by taking into consideration that Kim does not appear to have committed the crimes solely for personal gain, and that the profits acquired personally were also relatively small compared to the overall scale of the crimes.

(Photo: Yonhap News)