Five People Indicted for Creating 'Ghost Employees' and Embezzling Subsidies

[Asia Economy Honam Reporting Headquarters Reporter Park Jin-hyung] A group that embezzled 1.2 billion won in labor cost subsidies by using ghost employees has been brought to trial.

The Criminal Division 2 of Gwangju District Prosecutors' Office (Chief Prosecutor Lee Young-chang) announced on the 24th that three people, including company representatives A (34) and B (42), were arrested and indicted on charges of violating the Subsidy Management Act, while two recruiters were indicted without detention.

They were charged with deceiving the government and Gwangju City into believing that they had hired 104 people as regular employees from January 2019 to April this year, thereby pocketing 1.2 billion won in labor cost subsidies.

After recruiting ghost employees, they paid salaries and then recovered the money through accounts under false names, thoroughly preparing to avoid detection of their crimes.

They actively exploited the fact that on-site inspections by related agencies were relaxed to telephone inspections due to the impact of COVID-19.

Also, when the prosecution's investigation intensified, they circulated a "Prosecution Investigation Preparation Document" containing anticipated questions and false answers, and encouraged ghost employees to refuse to appear before the prosecution.

The prosecution received a fraud case from the police in which A and B conspired to embezzle about 32 million won in labor cost subsidies for six workers, and after supplementary investigations, uncovered the full extent of the organized crime.

The prosecution plans to continue investigating and criminally prosecute 28 additional ghost employees.

A prosecution official stated, "This is a very serious case that disregards the purpose of national policies aimed at alleviating employment difficulties and revitalizing the local economy by supporting labor costs amid the recession caused by COVID-19, and deprives young people of job opportunities."

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