Cases of Subsidy Corruption in Social Welfare Corporations and Facilities Uncovered by the Gyeonggi-do Special Judicial Police Unit
Gyeonggi Province has uncovered 17 individuals, including corporate representatives, who embezzled subsidies strictly restricted for use by social welfare corporations and facilities, using the funds for their own tuition or illegally leasing corporate and facility buildings to gain hundreds of millions of won in unfair profits.
The Gyeonggi Provincial Special Judicial Police announced on the 29th that "from February to July, based on related reports and inquiries, a focused investigation was conducted, resulting in the detection of illegal activities at six social welfare facilities (corporations) and the identification of 17 individuals including facility heads and corporate representatives. Eleven of them have been sent to the prosecution, and the remaining six who were criminally charged will also be sent to the prosecution once the investigation is completed." The total amount embezzled or fraudulently obtained through unfair profits amounts to 1.54 billion won.
Regarding specific types of corruption, the head of the A Regional Child Center in Anyang City falsely registered a person known as Mr. B as a care teacher and received personnel subsidy funds from Anyang City. Subsequently, using a method of withdrawing cash from Mr. B’s salary account debit card (payback), the head embezzled 84 million won in subsidies over 315 instances across seven years. It was revealed that the head used these funds for personal purposes such as graduate school tuition, family medical expenses, and living costs.
Another head of the C Regional Child Center in Anyang City was found to have embezzled 2.48 million won in subsidies by registering fake instructors without running actual programs for children, paying program fees to instructors who provided free classes, and then receiving the money back.
The Gyeonggi Special Judicial Police also uncovered three social welfare corporations that disposed of basic assets without permission.
According to the Social Welfare Services Act, when a social welfare corporation disposes of basic assets?properties essential for carrying out its purpose, such as leasing or selling?it must obtain prior approval from the city or provincial governor.
Former and current representatives of the social welfare corporation D in Anyang City illegally leased four properties, including 11 buildings and attached land (20,785㎡), which are basic assets of the corporation, to third parties without governor approval over seven years, gaining unfair profits of 765 million won.
Additionally, the representative of social welfare corporation E located in Suwon City was found to have illegally leased nine rooms (685.34㎡) of the corporation’s basic assets without governor approval for three years. It was revealed that the illegal rental income amounting to approximately 203 million won was spent on corporate operating expenses and welfare facility operations under the corporation.
The former CEO of social welfare corporation F in Yeoju City also illegally leased buildings and land (34,900㎡), which are basic assets, without governor approval from April 2018 to May 2021, gaining unfair profits of 488.4 million won.
The representative of social welfare corporation G, which aims to provide livelihood support and scholarship assistance to low-income children, was caught offering golf and meals to third parties using corporate profits to secure contracts for various service businesses with local governments and public institutions through private contracts. Investigations are ongoing into allegations of misuse of corporate funds, including paying false personnel expenses as compensation for certificate registrations and embezzlement by the representative and the representative’s sister-in-law.
The Gyeonggi Special Judicial Police stated that all such acts violate the Social Welfare Services Act and are punishable by up to five years imprisonment or fines up to 50 million won.
Kim Kwang-deok, head of the provincial special judicial police unit, said, "Most individuals involved with social welfare corporations work quietly with a sense of mission to provide social welfare services, but cases of a few unethical parties pursuing personal gain continue to be uncovered. We will conduct focused investigations into the misuse of subsidies by problematic social welfare facilities and corporations and strengthen investigations into subsidy corruption to ensure that welfare projects in the province are conducted fairly and transparently."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
