A 40-year-old San Juan Capistrano executive either bludgeoned or stabbed his business partner to death in the victim’s office to remove an “obstacle” to settling thorny lawsuits, a prosecutor told jurors Tuesday.

Ed Younghoon Shin, 40, had racked up gambling debts in Las Vegas and was fending off allegations of “improperly” taking $700,000 to $900,000 from his previous employer when he allegedly killed 32-year-old Christopher Ryan Smith in June of 2010, Senior Deputy District Attorney Matt Murphy said.

Shin’s attorneys declined to make an opening statement Tuesday and are planning to do so later this month.

Shin and Smith met while working in the advertising leads industry in Orange County and agreed to set up their own company 800XChange, which primarily focused on handing off leads to debt consolidation companies, Murphy said.

The “affable, charming” Shin was as successful as Smith, a surfing enthusiast who grew up in Watsonville, California, Murphy said.

Shin was the chief financial officer while Smith was the chief executive officer of the companies they subsequently formed.

Things were “going gangbusters” for the duo until Shin began shuttling back and forth from Las Vegas on private jets to bet “obscene” amounts of money, Murphy said.

And tensions rose when Shin’s prior employer sued the defendant and the victim over allegations of “improper redistribution of funds” in the range of $700,000 to $900,000, Murphy said. Then Shin got hit with a separate lawsuit, Murphy said.

Eventually, Shin negotiated a potential settlement of the litigation, but was given a five-month deadline, which allegedly became a problem when a now-suspicious Smith would not sign off on the agreement unless he received new protections against embezzlement.

“We need to make sure he doesn’t have room for fraud. He’s itching to do it again,” Smith wrote his attorney in an email on June 4, 2010, Murphy said. That evening, the attorney received an email, purportedly from Smith, declaring he agreed to a buyout from Shin and wished to go on a “surf safari” around the world, Murphy said.

Murphy alleged it was Shin who wrote that email as the start of a drawn-out attempt to cover up the murder.

The next day Shin emailed company employees that they would have the week off with pay while he negotiated Smith’s future with the company, Murphy said. The prosecutor alleged that Shin spent the days following the killing cleaning up the evidence.

Still, when employees returned to work they were met with such a fetid odor that they attempted to overcome it with candles and carpet deodorizer, Murphy said.

Shin kept up an email dialogue masquerading as Smith with the victim’s brother, Paul, who worked at the company, and Smith’s parents for about nine months, Murphy said. But clues popped up throughout that led the family to worry about Smith, Murphy said. Shin said Smith abruptly left his girlfriend of two years to travel the world with a new girlfriend, Tiffany Taylor, Murphy said.

While Shin and Paul Smith were on a Las Vegas trip, Smith met an “atmosphere model” at the casino named Tiffany Taylor, who did not know Chris Smith, Murphy said. Shin had emailed a picture of Tiffany Taylor — while pretending to be Smith — to the victim’s brother, and it was the same photo of the former Playboy model, Murphy said.

Smith’s father, Steve, eventually came to Orange County in April and hired a private investigator to find out what happened to his son, Murphy said. They reported him missing to Laguna Beach police, who eventually handed off the investigation to Orange County sheriff’s deputies because it was determined from forensic evidence that Smith was killed in his office, Murphy said.

Investigators found blood in the carpet, ceiling and in Smith’s Range Rover, Murphy said. The way the blood spattered led investigators to suspect the victim was beaten to death or stabbed, Murphy said.

“It was Helter Skelter,” Murphy said.

“The evidence is going to show that man brutally beat or stabbed Chris Smith to death,” Murphy said, pointing to Shin.

The overpowering stench employees experienced “was rotting human tissue,” Murphy said.

Kenny Kraft, who has been charged with being an accessory after the fact for allegedly helping Shin cover up the murder, is expected to testify under immunity, Murphy said.

Investigators never found the body, Murphy said.

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