Wando Fishing Village Cooperative Heads Embezzle 900 Million KRW in Subsidies... Systematic Fraud Uncovered

Self-Application System in Fishing Villages Becomes Hotbed for Fraudulent Subsidy Claims
Fraud Uncovered by Whistleblower
"Authorities Failed to Detect the Scheme"

A case of systematic subsidy fraud exploiting the loopholes in a subsidy project structure that concentrates authority in the hands of the head of a fishing village cooperative has been uncovered. As current and former heads of fishing village cooperatives, who embezzled hundreds of millions of won in subsidies by abusing a self-application process not directly overseen by local governments, have been referred to the prosecution, structural problems in the subsidy system have come under scrutiny.

According to the Wando Coast Guard on January 27, Mr. A (a man in his 50s), a former head of a fishing village cooperative in ○○-myeon, Wando County, is accused of inflating the number of applicants by including non-fishery residents and forging application documents when applying for the Eco-Friendly Certified Buoy Supply Project over a six-year period from 2018 to 2023, then submitting these falsified documents to government offices.

Wando Coast Guard arrested current and former heads of fishing villages and other related persons on charges of violating the Act on the Management of Subsidies. Photo by Wando Coast Guard

Investigations found that Mr. A fraudulently received approximately 57,000 eco-friendly certified buoys worth about 530 million won (530 million KRW) using these methods. The Wando Coast Guard arrested Mr. A and referred him to the prosecution on charges including violation of the Act on the Management of Subsidies, and three accomplices involved in the crime were also referred without detention on the same charges.

Similar cases of subsidy fraud have been detected in other towns within the same region. The Wando Coast Guard referred three current and former heads of fishing village cooperatives and one cooperative member to the prosecution without detention on charges including violation of the Act on the Management of Subsidies, after they submitted falsified documents without the consent of cooperative members between 2022 and 2023, fraudulently receiving about 22,000 eco-friendly buoys worth approximately 360 million won (360 million KRW).

This incident is believed to have been enabled by the application structure of the eco-friendly buoy supply project, which provided opportunities for fraudulent claims.

An official from Wando County explained, "It is impossible for the local government to receive applications from each individual fishery household due to the sheer volume of work and the large number of applicants. Therefore, the project was operated in a way where the head of the fishing village cooperative collected signatures from members and consolidated the total amount to apply to the county on behalf of the group."

The problem occurred during the distribution process of the buoys. Wando County stated, "If the buoys had been distributed properly to the applicants, there would have been no issue," adding, "It is presumed that Mr. A inflated or reduced the number of buoys requested."

For example, if Fisherman A was supposed to receive 100 buoys, he might have been given 150, or if Fisherman B applied for 100, he might have received only 50, with the difference being misappropriated.

Wando County clarified that it did not directly operate the project but instead entrusted its operation to the National Federation of Fisheries Cooperatives and others, so it was completely unaware of the fraudulent claims.

According to the investigation, Wando County was unable to detect the fraud because there were no complaints or suspicions raised by cooperative members whose documents were submitted without consent or by actual fishers. The investigation began after a tip-off to the Coast Guard, which subsequently uncovered the systematic crimes of the current and former cooperative heads.

The Wando County official stated, "If a guilty verdict is handed down by the court, it is our principle to recover the subsidies and not support the problematic project in the same region again."

Although the head of a fishing village cooperative does not receive a salary, there are some regional differences, and in some cases, a portion of business operation expenses may be provided depending on decisions made at members' meetings. However, despite being responsible for projects worth hundreds of millions of won, there are no effective checks and balances, and the concentration of authority among a few individuals is being pointed out as a structural issue.

A Coast Guard official stated, "This crime took advantage of the recurring nature of the annual subsidy project," adding, "We will continue to conduct strict investigations into crimes that undermine the livelihoods of the public, such as fraudulent subsidy claims."

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