Last Year, Government Project Subsidy Fraud Hits Record High with 630 Cases Detected

Record Number of Fraudulent Subsidy Claims Detected
Government Uncovers 630 Cases Worth 49.3 Billion KRW in Joint Inspection
Plan to Expand Anti-Fraud Efforts and On-Site Checks This Year

From July 2023 to June last year, 630 cases of fraudulent subsidy claims were detected in subsidy projects executed during that period. This is the highest number ever since the government began inspecting projects suspected of fraud and launched investigations. The amount involved in the detected fraud is approximately 49.3 billion KRW.

On the 18th, the Ministry of Economy and Finance held the '8th Joint Execution Inspection Promotion Team Meeting' chaired by Vice Minister Kim Yoon-sang and announced these results. The government extracted and inspected 8,079 subsidy projects suspected of fraud among those executed from July 2023 to June last year, and detected 630 cases involving fraudulent claims amounting to 49.3 billion KRW in national subsidies.

This performance represents about a 1.3-fold increase compared to the previous year (493 cases), marking the highest number ever recorded. Through the 'Joint On-site Inspection,' a collaboration between the Ministry of Economy and Finance, project ministries, the Fiscal Information Service, and accounting firms, 249 cases involving a total of 45.3 billion KRW in fraudulent claims were detected.

The Ministry of Economy and Finance explained that the significant increase was due to expanding the extraction of projects suspected of fraud from 7,521 cases in 2023 to 8,079 cases in 2024, and increasing joint on-site inspections from 400 to 510 cases. In particular, at the end of last year, a special on-site inspection was additionally conducted targeting 60 projects of public institutions where the detection rate was notably low in the first half of the year, resulting in the detection of 56 cases involving 15.3 billion KRW in fraudulent claims, contributing to the increase in performance.

Last year's fraudulent claims included cases where subsidy recipients and private contractors were closely analyzed for contract relationships, revealing methods such as 'split contracts' or false contracts through 'ghost companies.' There were also cases where services or goods purchases were concentrated on companies owned by sons or elder brothers. Instances were confirmed where subsidy cards were used in industries unrelated to the subsidy project’s purpose. There were also cases of receiving duplicate support for research management expenses.

Projects detected through inspections undergo additional verification processes such as review by the relevant ministry’s Fraudulent Claims Review Committee and police investigations. Once fraud is finally confirmed, sanctions such as subsidy recovery, imposition of penalty surcharges, exclusion from project execution, and public disclosure of names are imposed. The Ministry of Economy and Finance plans to further strengthen anti-fraud activities this year. The number of extracted suspicious cases will be expanded to over 10,000, and the number of joint on-site inspections will also be increased to over 500 cases.

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