'11.5 Billion Embezzlement' Public Official Sent to Prosecution... Use of Family-Name Securities Account Confirmed (Comprehensive)

Embezzlement, Forgery of Official Documents, and 5 Other Charges
Denies Accomplices When Questioned
Investigation into Whether Accounts Were Used for Criminal Purposes
Police Apply for Pre-Indictment Asset Seizure

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Kim Mo (47), a Grade 7 official at Gangdong District Office who was arrested on charges of embezzling 11.5 billion KRW of public funds, was handed over to the prosecution on the 3rd.

The Gangdong Police Station in Seoul transferred Kim to the Seoul Eastern District Prosecutors' Office at around 7:40 a.m. on the same day on five charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement in the course of duty), forgery of official documents, use of forged official documents, and fabrication and use of false official documents.

As Kim left the police station and got into the transport vehicle, he responded "No" to reporters' questions such as "Are there any accomplices?" and "Are there any district office employees or family members who know about the embezzlement?" He remained silent when asked whether he started embezzlement to cover stock losses and whether he invested the entire 7.7 billion KRW in stocks.

Although Kim reiterated that he acted alone, the police plan to continue investigating the possibility of accomplices. According to the Gangdong Police Station, it was confirmed that Kim used a securities account under a family member's name for stock investment. A police official said, "It was confirmed that a securities account capable of deposits and withdrawals was used for stock investment," and added, "Further investigation will be conducted to determine whether this was the original purpose of the crime and whether others were aware."

Kim is accused of embezzling 11.5 billion KRW sent by the Seoul Housing and Communities Corporation (SH) as a fund for building a resource circulation center, by transferring money from the district office account to his own account over 230 times during 15 months starting in 2019. Of the 11.5 billion KRW embezzled, 3.8 billion KRW was returned to the district office account by Kim, while 7.7 billion KRW remains unaccounted for. Police investigations revealed that a significant portion of the missing 7.7 billion KRW was spent on stock investments and other uses.

Previously, Kim told the police that he embezzled public funds to repay debts incurred from years of stock investments. At first, the embezzlement was intended to repay personal debts, and he tried to cover the funds by making profits through stock investments using a "margin trading" method, but as investment losses continued, the amount embezzled increased.

The police also decided to apply for seizure and preservation before indictment. A police official stated, "Real estate, movable property, and deposit balances under his name are subject to seizure." Seizure and preservation before indictment are decided when the police apply, the prosecution requests, and the court approves; if the court later issues a guilty verdict, the recovery process proceeds.

With most of the embezzled amount lost in stocks, full recovery is expected to be difficult. Recovery measures are taken only when possible, so if there are no assets, it is impossible.

Meanwhile, Gangdong District Office is focusing on recovering as much public funds as possible and is reviewing the fund management and operation system. A Gangdong District Office official said, "We are cooperating with the police to find ways to recover the funds as much as possible," but added, "However, if the police have no way to recover, the district office may not have any effective measures either." He also said, "We plan to comprehensively review and supplement the fund management and operation system."

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