Welfare Mall Scam Ring That Troubled Small Businesses Also Swindled Training Fees by Impersonating 'Gongin Certificates'

"Providing Welfare at Large Corporation Level" 140 Billion Won Collected from 4,020 SMEs
428 People Charged Training Fees by Deceiving with 'Corporate Welfare Instructor' National Certification

[Asia Economy Reporter Lee Jung-yoon] A group that deceived thousands of small and medium-sized enterprises by claiming to provide welfare benefits at the level of large corporations and embezzled hundreds of billions of won in membership fees and other charges has been brought to trial.

The Seoul Eastern District Prosecutors' Office Fair Trade and Economic Crime Division (Chief Prosecutor Kim Hyung-joo) announced on the 21st that the ringleader Lee Mo (45) was arrested and indicted on charges of fraud and violation of the Basic Qualification Act, and seven accomplices were indicted without detention.

In 2016, they established an organization called 'Hanguk Gieop Bokji' (Korean Corporate Welfare), a name similar to public institutions, to appear as if they were receiving budget support from the government and local governments. They are accused of deceiving 4,020 companies into believing that by joining, they could receive welfare services at the level of large corporations, and embezzling about 14.8 billion won from August 2018 to April this year. They falsely claimed that if each employee paid a membership fee of 200,000 won, they would receive welfare services worth about 2.9 million won per person annually, funded by government budgets.

They promised services with unit prices much higher than the membership fees, which eventually led to a 'Ponzi scheme' operation where the membership fees from new members were used to cover the welfare service payments for previously joined companies.

Additionally, they created affiliated organizations such as the 'Hanguk Gieop Bokji Jidosa Hyeophoe' (Korean Corporate Welfare Instructor Association) and 'Jungso Gieop Bokji Jiwondan' (SME Welfare Support Group), issuing unaccredited private certifications and falsely presenting them as essential and sole official qualifications for government-supported welfare projects, thereby defrauding 42.8 billion won in education fees from 428 people.

The 'Corporate Welfare Instructor' qualification they arbitrarily established was only registered as a private qualification in March 2018 and has never been officially accredited since.

The prosecution combined dozens of complaints filed since March this year and, through account tracking and raids, confirmed additional damages amounting to about 13.9 billion won beyond the 3.1 billion won claimed in the complaints.

This content was produced with the assistance of AI translation services.