Gwangju Labor Office: Man in His 40s Arrested for Embezzling 260 Million Won in Wage Guarantee Funds

Used for Settling Construction Payments and Debts
Fled and Went into Hiding Before Warrant Review

Gwangju Regional Employment and Labor Office

The Gwangju Regional Employment and Labor Office (Director Lee Doyoung) announced on the 4th that a construction contractor in his 40s, referred to as Mr. A, has been arrested on suspicion of violating the Wage Claim Guarantee Act. Mr. A allegedly induced representatives of subcontractors and creditors to fraudulently receive approximately 260 million won in simplified advance payments, in order to settle unpaid construction costs owed to subcontractors and repay money borrowed from creditors.

Mr. A is accused of conspiring with four subcontractor representatives in July 2023 to have workers from the subcontractor companies file wage arrears complaints against him with the Labor Office.

The four subcontractor representatives allegedly gave false statements during the investigation, claiming that the workers from their companies were directly employed by Mr. A. To support these claims, they also manipulated and submitted wage ledgers and other documents. Using this method, they disguised the workers as being directly employed by Mr. A, obtained confirmation of wage arrears from the Ministry of Employment and Labor, and then received the simplified advance payments.

While conspiring with the subcontractor representatives, Mr. A also included individuals who had never worked at the site as fake workers, or inflated the wage amounts beyond what was actually agreed upon, for personal gain. In addition, after borrowing money from creditor Mr. B and being unable to repay it, Mr. A conspired to use the simplified advance payments to settle the debt.

Mr. A recruited individuals who had never actually worked as employees of his construction company, instructed them to file false complaints with the Labor Office, and after receiving the simplified advance payments, delivered the funds to creditor Mr. B to repay a debt of 35 million won.

The Gwangju Labor Office became suspicious after receiving multiple wage arrears complaints against Mr. A and launched an investigation. Through witness statements, account tracking, and communication records, they uncovered the full extent of the scheme.

Mr. A evaded and went into hiding, including failing to appear for a pre-arrest suspect interrogation (warrant review). Labor inspectors persistently tracked and staked out Mr. A for over 30 days before finally apprehending him at his father's house. The Gwangju Labor Office decided to proceed with an arrest investigation, judging that Mr. A's actions constituted a serious abuse of the advance payment system for wage arrears workers and were of extremely poor character.

Lee Doyoung, Director of the Gwangju Regional Employment and Labor Office, stated, "The advance payment system is designed to support workers struggling due to unpaid wages. Abusing this system undermines the sound management of the wage claim guarantee fund and increases the burden on many employers who faithfully fulfill their payment obligations, thus harming the public interest. We will continue to respond strictly to malicious and intentional fraudulent claims with arrest investigations as a principle, and will not only recover the full amount fraudulently received but also impose additional charges up to five times the original amount."

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