Prosecutors Indict 5 Including Corporate CEO Who Pocketed 5.3 Billion Won from AI Fund

A group accused of embezzling 5.3 billion won from the Information and Communication Promotion Fund through false recruitment in the 'Artificial Intelligence (AI) Learning Data Construction Project' has been brought to trial.

On the 18th, the Seoul Northern District Prosecutors' Office Joint Investigation Team for National Financial Crimes (Chief Yoo Jin-seung) announced that five people, including the CEO of a consortium member corporation, were indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.

They are suspected of embezzling 5.3 billion won by falsely claiming to have hired Korean employees or signed service contracts with companies. In 2021, the National Information Society Agency (NIA) under the Ministry of Science and ICT conducted an AI data construction project aimed at creating jobs for AI learning data collection, processing, and verification. The group submitted plans stating they would hire 240 Korean employees and enter into service contracts with multiple specialized companies to carry out the project. However, it was revealed that from May 2021 to January of last year, they actually employed Indonesians with lower labor costs.

Furthermore, they embezzled the Information and Communication Promotion Fund by paying wages to subordinate employees who did not perform any work and by paying service fees to specialized companies with fictitious service contracts, then receiving the money back. The Information and Communication Promotion Fund is formed from government subsidies and contributions from telecommunications operators, thus having strong public interest.

The prosecution also filed summary indictments against 10 recruiters who falsely recruited employees and recovered wages paid to them, returning the money to the consortium member corporations, as well as six employees who fraudulently claimed unemployment benefits from the Employment and Labor Office using false work histories.

A prosecution official stated, "We will cooperate to ensure that subsidies are recovered as much as possible by providing related materials to the relevant ministries and victim institutions regarding this crime," and added, "We will strictly investigate financial corruption offenders to prevent the waste of taxpayers' money."