Amid Historic Boom in Asset Markets... Embezzlement Cases Seeking Quick Riches Occur Repeatedly

Ostem Implant and Gangdong-gu Office Followed by Gyeyang Electric's 'Embezzlement'
Regular External Audits Needed
Change Social Awareness and Promote Economic and Financial Education

[Asia Economy Reporter Jang Sehee] Since the COVID-19 pandemic, during the boom phase of asset markets such as real estate and stocks, 'get-rich-quick crimes' have been rampant. Recent cases involving the financial team leader of Ostem Implant, a public official from Gangdong District Office, and a financial team employee of Gyeyang Electric all committed crimes to increase their assets through stock investments and other means. Experts unanimously agree that monitoring through systems should be strengthened and social awareness changes should be promoted.

On the 18th, Moon Seong-gwan, the chief judge in charge of warrants at the Seoul Central District Court, issued an arrest warrant around 8:20 p.m. after a pre-arrest suspect interrogation (warrant substantive examination) for Mr. Kim, who was charged with embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. The court, after the substantive examination, judged that "the criminal charges are substantiated and there is a risk of flight."

Mr. Kim is accused of embezzling 24.5 billion KRW of company funds over six years since 2016 by manipulating company purchase ledgers and fabricating financial statements to match bank balance certificates. The police plan to verify the flow of funds and whether there are accomplices through account tracking and communication record inquiries.

According to the police, Mr. Kim stated to the company that "the embezzled money was all spent on stocks, Bitcoin, gambling, and entertainment expenses." Gyeyang Electric discovered Mr. Kim's crime during an audit process while requesting documents from him and filed a complaint with the police on the 15th. The estimated embezzlement amount of 24.5 billion KRW corresponds to 12.7% of Gyeyang Electric's equity capital (192.6 billion KRW).

Recently, crimes exploiting poor internal monitoring have been increasing. Defendant Lee (45) in the Ostem Implant embezzlement case diverted company funds into stock investments from November 2020 to October last year. Kim (47) in the Gangdong District Office embezzlement case also diverted funds from the district office's waste disposal facility installation fund into stock investments from December 2019 to February last year.

Experts point out that internal systems should be strengthened with double or triple layers and regular monitoring should be conducted.

Professor Kwak Daekyung of Dongguk University’s Department of Police Science said, "It seems that during the audit, they just temporarily matched the numbers and overlooked the issue," adding, "Decisions related to money should not be made alone or within the department but should undergo double or triple audits." He also stated, "It is desirable to conduct external audits regularly at least once every six months."

Furthermore, Professor Kwak explained, "There needs to be a social awareness change that seeking quick riches through asset investments without effort is risky," and "strengthening economic and financial education from a young age is also a good approach."

Meanwhile, according to the National Police Agency's 'Major Economic Crime Occurrence and Arrest Status,' the number of embezzlement cases recorded 58,889 in 2020, a significant increase compared to 26,767 cases in 2011.

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