SME CEO involved in 'illegal foreign currency smuggling' for client rebates fined in first trial

"Chinese Client Wants Rebates in Korea"
CEO: "Overseas Branch Manager Distrusted Due to Embezzlement"
"Stored Due to Delivery Accident Concerns"
But Court Acknowledges Conspiracy

[Asia Economy Reporter Oh Gyumin] The CEO of a small and medium-sized enterprise (SME) who was prosecuted for smuggling and storing dollars dozens of times to pay rebates to business partners was sentenced to a fine in the first trial.

On the 17th, Kim Woo-jung, Chief Judge of Criminal Division 8 at the Seoul Western District Court, announced that on the 6th, he sentenced Mr. A (60), the CEO of an SME indicted for violating the Foreign Exchange Transactions Act, to a fine of 30 million won.

Mr. A is accused of receiving 1,150,877 dollars (approximately 1.5 billion won) smuggled into the country 13 times by Mr. B, the head of his company's Hong Kong branch, from January 11 to October 31, 2017.

According to the court, Mr. A received a report from Mr. B stating, "To operate the corporation, we need to pay rebates worth 1 million dollars to a Chinese business partner, but the partner wants to receive the payment within Korea." Mr. A conspired with Mr. B to receive and store the foreign currency smuggled by Mr. B.

In court, Mr. A argued, "I distrusted Mr. B's spending of funds due to his embezzlement of corporate funds," and "Since Mr. B said he was bringing in foreign currency to pay the business partner in cash, I received the foreign currency to confirm that it was delivered to the partner without any delivery accidents." He added, "I did not know whether Mr. B reported the import to the Minister of Strategy and Finance when bringing in the foreign currency, and I only thought the foreign currency was imported through legal procedures, so I did not conspire to smuggle."

In response, the court judged that Mr. A's conspiracy was proven based on ▲ Mr. A's previous statement that "He knew Mr. B used the Hong Kong corporation to create slush funds of 1,280,877 dollars and smuggle them," ▲ the complaint submitted by Mr. A accusing the whistleblower of extortion, which included a statement acknowledging agreement to bring Hong Kong slush funds into Korea and admitting violation of the Foreign Exchange Transactions Act, and ▲ conversation records found on Mr. B's mobile phone after his death.

If the amount of payment instruments or securities to be imported or exported exceeds 30,000 US dollars, a declaration form designated and announced by the Minister of Strategy and Finance must be submitted to him. Failure to comply results in punishment for smuggling foreign currency.

Meanwhile, the SME in question is known to be a transportation specialist company located in Gangnam-gu, Seoul.

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