The Tokyo District Court on Tuesday sentenced a former head of a failed credit union that catered mainly to pro-Pyongyang Korean residents of Tokyo to 3 1/2 years in prison for illegally diverting more than 800 million yen of the credit union’s funds.
The ruling falls short of the prosecutors’ demand for five years in prison for Chong Gyong Saeng, 65, former head of Chogin Tokyo credit union. The credit union collapsed in May 1999.
Chong immediately appealed the ruling to a higher court.
Sin Byong Jung, 55, former head of the credit union and an accomplice, was sentenced to 2 1/2 years in prison, suspended for five years. Prosecutors had demanded three years for Sin.
Chong and Sin are also charged with obstructing a 1998 inspection conducted by the Tokyo Metropolitan Government by withholding information about the credit union’s bad loans, in violation of the law governing the operation of cooperatives.
In the ruling, presiding Judge Kazuyuki Okuma denounced Chong’s act as organized wrongdoing carried out jointly with the pro-Pyongyang General Association of Korean Residents in Japan (Chongryun), adding that it damaged public trust in financial order.
During the trial, the two admitted the charges and apologized for betraying members of the credit union.
In their closing arguments, defense lawyers appealed for lenient sentences, noting that the two did not gain personally and embezzled the funds under strong pressure from Chongryun officials.
According to the ruling, Chong and Sin diverted about 837 million yen of the credit union’s funds to Chongryun between 1994 and 1998. In 1998, the two also failed to detail bad loans in official reports to Tokyo inspectors about channeling the funds to Chongryun.
Kang Yong Kwan, 67, a former head of the financial bureau of Chongryun who has been indicted for instructing the credit union officials to embezzle the funds, has pleaded not guilty in a separate trial.
Judge Okuma determined in Tuesday’s ruling, however, that Kang asked for the money knowing that credit union executives were engaged in illicit operations.