Gang Arrested for Embezzling 5.4 Billion Won in Environmental Vehicle Purchase Subsidies Using Fake Documents

The police have arrested 36 people, including the CEO of a car manufacturing company, who deceived local governments with false documents to embezzle approximately 5.4 billion KRW in environmental vehicle purchase subsidies.

Interior of the vehicle used in the crime. [Photo by Gwanak Police Station]

On the 30th, the Seoul Gwanak Police Station announced that they had sent CEO A of a car import and manufacturing company to the Seoul Central District Prosecutors' Office under arrest the previous day on charges of violating the Act on the Management of Subsidies and the Act on the Aggravated Punishment of Specific Economic Crimes (fraud). Thirty-five accomplices, including the CEO of a special-purpose vehicle company, were also sent to prosecution.

According to the police, A is suspected of exploiting a systemic loophole that allows environmental low-emission vehicle purchase subsidies to be granted as long as documents such as vehicle manufacturing certificates and purchase contracts are prepared. From December 2020 to December 2021, he embezzled about 5.4 billion KRW in electric vehicle purchase subsidies from three local governments: Gimpo, Daegu, and Yongin.

To carry out the crime, A imported 92 vehicle bodies without batteries or other parts through China, then borrowed names from 35 people including business partners and acquaintances to create false contracts as if electric vehicles were being sold normally. Additionally, he exploited a loophole in the current vehicle registration system, where actual vehicle inspections through testing centers are virtually omitted for car manufacturers, fabricating documents such as vehicle manufacturing certificates to register the vehicles as if they were completed cars.

[Provided by Gwanak Police Station]

The police have notified related ministries, including the Ministry of Environment and the local governments that provided the subsidies, to request the recovery of the fraudulently received subsidies and are proceeding with the seizure of criminal proceeds, taking measures to recover the national treasury.

Park Min-young, chief of the Gwanak Police Station, said, "Based on the confirmed methods, we will continue to strengthen cooperation among related ministries to eradicate subsidy fraud that causes leakage of national funds, and we will carry out strict crackdowns and investigations going forward."

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