Illegal Export of Foreign Currency Worth About 170 Billion Won... Duty-Free Shop Employee Passes Security Area Wearing a Vest

Incheon District Prosecutors' Office, 10 Key Figures Detained and Indicted... 48 Others Indicted Without Detention or Summarily Prosecuted
Illegal Funds and Overseas Cryptocurrency Purchase Funds Falsely Reported as Travel Expenses

Specially made abdominal binder injected with silicone
[Photo by Incheon District Prosecutors' Office]

[Asia Economy Reporter Park Hyesook] Ten organizations that illegally exported foreign currency worth about 170 billion KRW overseas by falsely declaring illegal funds or funds for purchasing overseas cryptocurrency as travel expenses have been caught by the prosecution. In this process, duty-free shop employees and branch managers of commercial banks were also involved in the crime after receiving money.

The Foreign Affairs Division of Incheon District Prosecutors' Office (Chief Prosecutor Yang Geonsu) announced on the 28th that it had uncovered 10 organizations on charges including violation of the Foreign Exchange Transactions Act, arresting and indicting 10 ringleaders including A (23), and prosecuting 48 accomplices including B (34) without detention or by summary indictment.

The 10 organizations caught are accused of smuggling foreign currency worth a total of 173.3 billion KRW to six overseas countries including Japan and China from May 2017 to December last year.

They were investigated to have falsely declared illegal funds such as so-called 'hawala' funds, smuggled money, and criminal proceeds, as well as funds for purchasing overseas cryptocurrency, as travel expenses to customs authorities.

According to the Foreign Exchange Transactions Act, domestic residents must report in advance to the Bank of Korea governor or others and submit related supporting documents when exporting foreign currency overseas.

However, these organizations exploited a loophole in the system where there is no limit on the upper amount for travel expenses and no need for supporting documents. The smuggling organizations paid a handling fee of 300,000 KRW per case and covered all travel expenses, hiring multiple couriers to carry out the crime.

In this process, a branch of a commercial bank that received money from the smuggling organizations and provided preferential exchange rates and other currency exchange conveniences, assisting in exchanging foreign currency worth about 20.6 billion KRW, was also caught.

Additionally, duty-free shop employees who could normally enter the security zone of Incheon International Airport through a separate 'resident staff gate' also participated in the crime.

Four duty-free shop employees, instructed by the illegal foreign currency export organizations, concealed foreign currency in specially made vests injected with silicone, wore them on their bodies, passed through the gate leading to the security zone, and then handed the money to the couriers.

The duty-free shop employees transported 100 million to 200 million KRW at a time, up to 500 million KRW per day, receiving a handling fee of 100,000 to 500,000 KRW. One duty-free shop employee who contributed significantly to the crime also received a rental car free of charge from the illegal foreign currency export organization.

The smuggled funds were investigated to have been used for exchanging gambling funds at casinos in the Philippines.

Yoon Cheolmin, the spokesperson for the Incheon District Prosecutors' Office, said, "The specially made vest was injected with silicone, so even if customs authorities conducted manual security checks, they could not confirm whether money was inside due to the silicone's texture," adding, "We plan to notify Incheon International Airport Corporation about the lack of separate management for duty-free shop employees who enter the resident staff gate several times a day to prevent recurrence."