Search and Seizure of Manufacturers and Distributors for Mask Hoarding and Distribution Disruption (Comprehensive)
[Asia Economy Reporter Seongpil Cho] On the 6th, prosecutors conducted raids on multiple health product companies in the Seoul metropolitan area that hoarded masks taking advantage of the spread of the novel coronavirus infection (COVID-19).
The Seoul Central District Prosecutors' Office's Special Investigation Team for Distribution Disruption Offenses of Health Products such as Masks (led by Juncheol Jeon, Head of the Anti-Corruption Investigation Division 2) sent prosecutors and investigators to about 10 mask manufacturing and distribution companies mainly in the metropolitan area this morning to secure production and transaction records of masks and other items. The prosecutors plan to first seize other evidence proving the charges such as transaction records, while ensuring that the masks stored by the businesses are distributed immediately as much as possible.
It is known that the prosecutors launched a forced investigation after detecting signs that these companies hoarded masks in violation of the Price Stabilization Act. Under the Price Stabilization Act, hoarding of health products is designated as speculative hoarding by the Minister of Strategy and Finance when it is recognized that it may harm price stability, punishable by up to two years imprisonment or a fine of up to 50 million won. If evidence of undocumented transactions by the companies emerges, prosecutors plan to apply charges under the Tax Offense Punishment Act as well.
Earlier, on the 27th of last month, the Supreme Prosecutors' Office sent a directive letter titled 'Strict Measures on COVID-19 Related Cases and Dissemination of Case Handling Standards' to prosecutors nationwide. The letter instructed that offenses related to 'mask distribution disruption and fraud involving health products' be handled more severely than existing case handling standards, considering the seriousness of the situation.
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Accordingly, on the 28th of last month, the Seoul Central District Prosecutors' Office formed a special investigation team for mask-related crimes led by the former Head of Anti-Corruption Investigation Division 2, deploying eight prosecutors. This special investigation team is cracking down on ▲ large-scale speculative hoarding of health products by mask manufacturers and sellers ▲ violations of emergency supply adjustment measures ▲ large-scale undocumented transactions and transactions involving defective masks. This is the first time the special investigation team has directly launched an investigation into mask hoarding based on intelligence it independently obtained.
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