A Pilates studio owner who continued selling memberships before abruptly closing her business, causing harm to 350 people including members and instructors, has received a prison sentence.
Judge Jeon Hee-sook of the Gwangju District Court's Criminal Division 9 sentenced the Pilates center owner, identified as A (35, female), to 10 months in prison on fraud charges, according to legal circles on the 24th.
A is accused of running a Pilates center in Gwangju from February 2023 to June 2024 and selling memberships despite lacking the ability to continue classes normally, taking approximately 286 million won from 350 people, including members and instructors, in the form of usage fees and instructor fees.
The investigation found that A's financial situation had deteriorated even before the center opened. She had failed to properly pay management fees and rent at her existing business, yet continued to relocate to larger premises and open new branches, sustaining the business by covering operating costs with proceeds from long-term membership sales, the investigation found.
It also emerged that she lacked a proper foundation for normal operations from the time the center opened. A held 45.2 million won in debt, including loans and overdue card payments, while in the lowest credit rating bracket, and secured initial operating funds through investment money and long-term membership sales proceeds, according to the findings. On this basis, the court determined that she lacked stable operating capacity from the time of opening.
In particular, A continued recruiting members right up until she suspended operations on June 30, 2024. Just two days before closing, she held a long-term membership discount event and encouraged additional sign-ups, the investigation found.
The court determined that willful negligence constituting fraud was established, finding that A continued selling memberships and hiring instructors despite knowing that it might become difficult to provide services or pay instructor fees.
"The defendant sold memberships while fully aware of the possibility that she would be unable to provide normal services or pay instructor fees," Judge Jeon said. "With victims reaching 350 and the amount defrauded being considerable, her culpability is heavy."
However, the judge explained that "the fact that some classes were actually held and that she made efforts to recover the damage, such as reaching settlements with approximately 140 victims, was reflected in the sentencing."
