Criminal Appellate Judgment No. 958/2023/HS-PT regarding the Offense of Fraud and Appropriation of Property

​The appellate criminal judgment No. 958/2023/HS-PT, dated December 15, 2023

Criminal Appellate Judgment No. 958/2023/HS-PT regarding the Offense of Fraud and Appropriation of Property

Case Summary

In early 2015, a South Korean individual named Kim Sung H introduced Kim Bum J as the General Director of IDS H Korea, which had branches in multiple countries. Kim Bum J was asked to establish a branch of IDS H in Vietnam to attract investors and raise capital. Under their agreement, Kim Bum J would receive 4% of the total funds raised, while the remaining would supposedly be transferred to Korea for foreign exchange (forex) investment.

From April 2015 to October 2018, Kim Bum J established four companies in Vietnam to conduct illegal fundraising operations. In reality, these companies:

• Did not transfer funds to Korea,

• Did not engage in legitimate business activities as advertised,

• Used investors’ money to pay interest and commissions to earlier participants, cover operational costs, maintain the system, and for personal enrichment.

The four companies were:

1. IDS C Co., Ltd.

2. IDS H Co., Ltd.

3. R Vietnam Co., Ltd.

4. K A Co., Ltd.

These companies conducted widespread fundraising activities disguised as business cooperation contracts, promising high returns. In total, 156 victims were identified, with an illegally appropriated amount of VND 77.6 billion (~USD 3.1 million).

Court’s Findings and Sentencing

Based on the investigation, court proceedings, and evidence presented:

1. The defendants—Kim Bum J, Nguyễn Thị H, Nguyễn Hoàng D, Nguyễn Đức L, Nguyễn Thị Kim T, Trần Quốc C, Ninh Thị Thanh T1, and Nguyễn Thị Hồng Q—were convicted of “Fraudulent Appropriation of Property” under Point a, Clause 4, Article 174 of the 2015 Penal Code (amended in 2017).

2. The primary offender was Kim Bum J, identified as the ringleader who directed all company operations, devised fraudulent strategies, instructed the co-defendants, and controlled the flow of funds. The court found the amount appropriated was exceptionally large, causing severe social consequences.

3. Although Kim Bum J appealed for a reduced sentence, no new mitigating circumstances were presented beyond those already considered. The appellate court upheld the life sentence for Kim Bum J.

4. Other defendants, while not initiators, were found to have knowingly participated in the fraud through operational roles, including:

   • Managing company finances,

   • Organizing investor recruitment,

   • Promoting fake “investment packages” through unauthorized business contracts.

5. Final Sentences:

   • Kim Bum J: Life imprisonment.

   • Nguyễn Thị H: 18 years in prison.

   • Nguyễn Hoàng D: 17 years.

   • Nguyễn Đức L: 9 years and 6 months.

   • Nguyễn Thị Kim T: 9 years.

   • Trần Quốc C: 8 years.

   • Ninh Thị Thanh T1: 8 years.

   • Nguyễn Thị Hồng Q: 7 years.

6. The court affirmed that all funds used to pay interest and commissions came exclusively from later investors, confirming the Ponzi-like structure of the scheme. Claims that funds were sourced from business operations or Korean investors were dismissed as baseless.

7. The appellate court also rejected the appeals of victims and related third parties, affirming the lower court’s rulings that companies involved in illegal fund transfers must return the money they had received.

8. Only the appeals of Ninh Thị Thanh T1 and Nguyễn Thị Kim T were partially accepted, leading to a slight adjustment in their sentencing terms.

Legal Brief: Criminal Case No. 958/2023/HS-PT

Court: High People’s Court in Ho Chi Minh City
Date of Judgment: December 15, 2023
Case Number: 958/2023/HS-PT
Charge: Fraudulent Appropriation of Property (Article 174(4)(a) – Penal Code 2015, amended 2017)
Total Appropriated Amount: ~VND 77.6 billion (~USD 3.1 million)
Victims: 156 individuals
Duration of Offense: April 2015 – October 2018

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Key Facts:

• Mastermind: Kim Bum J (South Korean national) orchestrated a large-scale fraudulent investment scheme via 4 companies: IDS C Co., IDS H Co., R Vietnam Co., and K A Co.

• The companies falsely promised high investment returns, disguising activities as legal business cooperation, while running a Ponzi-like operation.

• Funds collected from later investors were used to pay earlier ones; no real business or overseas investment occurred.

• Co-defendants played key roles in investor outreach, fund management, and contract handling.

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Defendants and Final Sentences:

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Appellate Outcome:

• Main appeals rejected. The appellate court found the first instance judgment appropriate in law and fact.

• Mitigating factors (e.g., cooperation, partial restitution) had already been considered at the first level.

• Appeals from third parties and victims were also dismissed; companies that illegally received investor funds were ordered to return them.

• Only two defendants (T1 and T) had minor adjustments made to their sentences.

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Court's Remarks:

• The case involved serious, organized financial fraud with sophisticated deception.

• The operation severely affected public trust, investor safety, and social order.

• The judgment affirms Vietnam’s strict stance on cross-border investment fraud and illegal fundraising.

Sources: https://congbobanan.toaan.gov.vn