OSAKA — The Osaka High Court on Thursday upheld a 7 1/2-year prison term and 500 million yen fine for an Osaka-based South Korean real-estate developer for his involvement in the collapse of trading house Itoman Corp.

The court rejected an appeal filed by Heo Young Joong, a key figure in one of Japan’s largest postwar cases of business fraud.

Heo, 55, immediately appealed Thursday’s decision to the Supreme Court.

He was convicted in March 2001 of aggravated breach of trust for conspiring with Yoshihiko Kawamura, 78, a former Itoman president, and Suemitsu Ito, 57, a former managing director, to cause the Osaka-based firm to incur about 36 billion yen in losses in 1990.

Heo was also found to have evaded 3 billion yen in corporate taxes in the business year that ended in March 1990.

Presiding Judge Akira Nasu said Heo obtained the “biggest financial benefits” out of the fraud and his criminal liability “dwarfs” that of the former Itoman executives.

Heo pleaded not guilty to both charges. But Nasu asserted he played “a crucial role” in the case and “exploited Itoman, whose financial health had been deteriorating.”

The scheme, hatched during Japan’s asset-inflated bubble economy years of the late 1980s and early 1990s, saw Itoman funds used to buy paintings at inflated prices from Heo’s companies and to invest in his golf course development projects without securing sufficient collateral, the court found.

The bad deals led to Itoman’s collapse and subsequent absorption in 1993 by Sumikin Bussan Kaisha Ltd., a subsidiary of Sumitomo Metal Industries Ltd., bringing the midsize trading house’s 110-year history to an end.

Heo insisted he did not sell the paintings but merely borrowed money from Itoman by using the art as collateral.

But the judge brushed aside the argument, concluding it was “obvious that (Heo) sold the paintings at exorbitant prices to satisfy his own financial needs.”

Once known as an influential fixer with ties not only to political and business circles but also to the underworld, Heo sat motionless as he listened to the ruling. His seat was shielded from the gallery with bulletproof boards.

In April, the Osaka High Court turned down appeals by Ito and Kawamura following lower court sentences. Kawamura was sentenced to seven years in prison and Ito to 10. They have appealed to the Supreme Court.

The Osaka District Court spent nearly 10 years on the case because Heo jumped bail and vanished after being allowed to travel to South Korea to attend a memorial service for a relative of his wife.

He was captured in November 1999 at a Tokyo hotel, and his trial resumed in February 2000.

Heo is also appealing a Tokyo District Court ruling on a fraud case involving the oil product sales firm Ishibashi Sangyo. In June, he was sentenced to seven years in prison for swindling the firm out of a promissory note for about 18 billion yen that was entrusted to him.

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