The Anti-Corruption Commission Takes Severe Disciplinary Action Against Officials Embezzling Government Subsidies... '12.7 Billion KRW Recovered'

Concentrated Reporting Period Until the End of Next Month
Up to 3 Billion KRW Reward for Whistleblowers

The Anti-Corruption and Civil Rights Commission (ACRC) announced on the 12th that it has imposed severe disciplinary actions on officials of government-supported associations and companies who embezzled government subsidies, and has recovered approximately 12.7 billion KRW of improperly wasted budget.

Yu Cheol-hwan, Chairman of the Anti-Corruption and Civil Rights Commission
[Photo by Anti-Corruption and Civil Rights Commission]

According to the ACRC, Association A, which was commissioned by the Ministry of Environment to carry out projects, was found to have embezzled about 3.9 billion KRW in government subsidies from 2016 to 2022.

They embezzled approximately 2.7 billion KRW by paying excessive wages to affiliated employees from 2016 to 2020 and then receiving back amounts exceeding the monthly salary set by the association through separate accounts. Additionally, from 2018 to 2022, they falsely registered 64 employees as participating in projects and improperly received about 1.18 billion KRW in labor costs.

During this process, it was revealed that the full-time vice president of Association A, who was involved in the embezzlement of labor costs, was a former senior official of the supervisory agency. Six related individuals, including the vice president, were disciplined.

Another company, Company B, embezzled about 3.4 billion KRW of research and development funds by inflating prices of goods or issuing false tax invoices as if purchasing goods that were not actually bought.

The Ministry of Trade, Industry and Energy recovered a total of 9.8 billion KRW to the national treasury, including 6.4 billion KRW of research and development funds embezzled by Company B and penalty surcharges. The director who led this was sentenced to three years in prison with a four-year probation.

The ACRC is investigating the actual conditions of penalty surcharges imposed by each institution by selecting vulnerable areas for fraudulent receipt. As part of this, it inspected the voucher service sector from October last year to April this year.

The inspection revealed that since 2020, about 28,000 cases of fraudulent receipt related to vouchers were detected. It was found that approximately 22.2 billion KRW of penalty surcharges were not imposed by 64 local governments. The ACRC recommended that the relevant local governments impose the penalty surcharges.

Furthermore, to prevent fraudulent receipt of government subsidies, the ACRC will operate a focused reporting period from May to the end of July this year. Reporters’ identities and confidentiality are strictly protected from the reporting stage, and if the report leads to direct recovery of public institution revenues, they can receive rewards up to 3 billion KRW based on their contribution.

Jung Seung-yoon, Vice Chairman and Secretary-General of the ACRC, said, "Since national funds are the people's hard-earned taxes, not a single penny should be wasted. We will promote reporting to eradicate fraudulent receipt and intensively inspect areas where fraudulent receipt frequently occurs, such as research and development funds."

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