Lee, the head of the prominent Korean gallery Seojung Art, has been sentenced to 18 years in prison in a first-instance ruling after being charged in connection with an approximately KRW 100 billion “art-tech” Ponzi scheme.
 
An art-tech Ponzi scheme is a form of financial fraud in which investments in artworks are used as bait to attract new investors, whose funds are then used to pay returns to earlier investors.
 
On July 7, the Criminal Division 23 of the Seoul Central District Court sentenced Lee to 18 years in prison on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Act on the Regulation of Conducting Fund-Raising Business Without Permission. The court also ordered the forfeiture of approximately KRW 14.19 billion, which it recognized as criminal proceeds.
 
The court recognized 981 victims and losses totaling more than KRW 110 billion, making it the largest illegal fundraising case involving so-called “art-tech” investment schemes in South Korea to date.

After founding Seojung Art in 2015, Lee operated an art investment business that promised investors monthly returns generated through exhibitions, artwork rentals, print production, and other commercial activities. Investors were encouraged to purchase artworks and consign them to the gallery, which guaranteed both regular profit payments and the return of principal upon the expiration of the contract.
 
Through exhibitions featuring prominent Korean and international artists and participation in major art fairs, Seojung Art built a reputation that enabled it to attract more than KRW 100 billion in investment funds.
 
However, investigators later found that many of the artworks covered by investment contracts either did not exist or had already been sold to other buyers. It was also revealed that most investors had never physically verified the works they had supposedly purchased.
 
By 2024, the company had become unable to meet its payment obligations to existing investors using incoming funds alone, and profit distributions were suspended entirely in May of that year. After the payments abruptly stopped, investors filed criminal complaints against Lee with the police.
 
In its ruling, the court stated that “the defendant exploited the public’s interest in and desire to invest in artworks as a safe financial asset, using the so-called ‘art-tech’ scheme to defraud 981 victims of more than KRW 100 billion between 2016 and 2025.” The court added that “the gravity of the offense is extremely serious.” Lee has since appealed the first-instance verdict.

References

• 한겨레, 1천억 ‘아트테크 폰지사기’ 서정아트센터 대표, 1심 징역 18년 선고, 2026.07.12