"Customer's Money Is My Money" Nearly 100 Cases of Embezzlement and Sexual Harassment Over 5 Years [Corruption Report Saemaeul Geumgo①]

Embezzlement Most Common Among Corruption Cases
Chairman Faces Sexual Harassment and Power Abuse Allegations
Strengthening Audit Functions and Strict Measures Needed

#Recently, a massive embezzlement incident worth 4 billion KRW occurred at the Songpa Jungang Saemaeul Geumgo in Seoul. A staff member in their 50s, Mr. A, who had worked at the credit union for over 30 years, embezzled funds by arbitrarily canceling customers' deposits and insurance products over 17 years since 2005, using a 'Ponzi scheme' method where new customers' deposits were used to repay matured deposits.

#Mr. B, a staff member in his 40s at a Saemaeul Geumgo in Cheongju, was legally detained last year. From 2010 to 2019, Mr. B embezzled 1.06 billion KRW by prematurely canceling customers' fixed deposits and used the money for living expenses. To conceal his crimes, he also falsified the Saemaeul Geumgo's electronic records.

#At another Saemaeul Geumgo in Daegu, the issue of sexual harassment and abuse of power by Chairman C, in his 50s, came under scrutiny. Chairman C reportedly made sexual remarks such as "Female employees look prettier when wearing skirts" and "Women should have big breasts." Employees who suffered this abuse for about two years eventually reported it to the Saemaeul Geumgo Central Association, and Chairman C was legally detained in March on charges of forcible molestation, assault, and illegal loans.

Corruption incidents at Saemaeul Geumgo continue unabated. It has been identified that nearly 100 corruption cases have occurred at Saemaeul Geumgo over the past five years.

According to the 'Saemaeul Geumgo Corruption by Type' data obtained on the 21st through the office of Park Jae-ho, a member of the Democratic Party, the total number of corruption cases from 2017 to last month was 97. Saemaeul Geumgo operates 1,297 head offices and 3,218 branches nationwide, with assets totaling 239 trillion KRW. It is a representative financial institution for ordinary citizens with 21.4 million customers, but the moral decay among employees appears to be severe.

Among the corruption cases at Saemaeul Geumgo, embezzlement accounted for a high proportion. From 2017 onward, there were a total of 58 embezzlement cases. Although there were annual fluctuations, about 10 cases occurred steadily each year: 11 in 2017, 14 in 2018, 10 in 2019, 14 in 2020, and 6 in 2021. This year, when the Ministry of the Interior and Safety announced plans to strengthen supervision of Saemaeul Geumgo, three embezzlement cases had already occurred by May. The number of embezzlement cases at Saemaeul Geumgo exceeds half of the entire banking sector's total (91 cases). Compared to savings banks, which are also part of the secondary financial sector like Saemaeul Geumgo (7 cases), the figure is more than eight times higher.

By type, breach of trust accounted for 14 cases, the second most after embezzlement, and sexual harassment occurred in 11 cases. Especially at Saemaeul Geumgo branches nationwide, where each chairman exercises autocratic power, workplace harassment and sexual harassment complaints are known to be significant. Jin-ah Lee, a labor attorney at Workplace Abuse 119, pointed out, "Saemaeul Geumgo branches are small workspaces, and the chairman's power is overwhelming, which isolates victims even more." Other corruption incidents accounted for 14 cases.

Representative Park stated, "Corruption and misconduct at Saemaeul Geumgo, a financial institution for ordinary citizens, are serious. It is time to reconsider whether the Ministry of the Interior and Safety should be responsible for management and supervision," and emphasized, "Strengthening audit functions and strict punishment for corruption are necessary."