Representative of A Nursing Hospital Suspected of Underreporting Minimum Wage to Avoid Over 1 Billion Won in Additional Taxes

Unpaid Medical Benefits Over 1 Billion Won from Hospital Operation Using Borrowed Name
County: "Suspected Minimum Wage Issues but No Means Other Than Payment Demand"
Representative: "Hospital Operating at a Loss, Receiving Minimum Wage... Will Pay in Full Once Lawsuit Concludes"

Buyeo County Office Exterior View

The CEO of a nursing hospital in the Buyeo area of Chungnam is suspected of reporting salaries at the minimum wage level to avoid seizure of a 1 billion KRW-level additional collection amount.

According to a comprehensive report by Asia Economy on the 6th, Mr. A, who was appointed CEO of the nursing hospital on November 4, 2022, was found to have operated the hospital under borrowed name from November 2006 to April 2007, was caught, and received a suspended prison sentence. He was ordered to pay back approximately 1 billion KRW in medical benefits fraud by Buyeo County and the National Health Insurance Corporation.

According to the Medical Service Act, a person sentenced to imprisonment or higher cannot serve as the representative of a medical corporation. Therefore, his wife, Mrs. B, succeeded as CEO in September 2008. After Mr. A’s legal sanctions were lifted, on November 3, 2022, Mrs. B resigned as CEO, and the next day, Mr. A was appointed CEO. Mr. A has not paid the approximately 1 billion KRW in additional collection amounts for medical benefits fraud imposed by Buyeo County and the Health Insurance Corporation for over 10 years.

After his appointment as CEO, Mr. A is reportedly under investigation after the Chungnam Provincial Police Agency recently sent him to the prosecution with charges of embezzling about 1 billion KRW in hospital operating funds.

There is suspicion that Mr. A exploited the fact that minimum wages cannot be seized to embezzle hospital funds for personal use rather than operating the hospital properly.

However, administrative agencies reportedly state that the collection of Mr. A’s additional collection amount was related to his operation of a private hospital, and since the current nursing hospital he represents is a corporation, there is no legal way to impose seizure or other sanctions against the corporation.

Accordingly, there are calls for administrative agencies to request investigations from judicial authorities and for related laws to be amended to strengthen sanctions in case of non-payment of additional collection amounts.

A Buyeo County official said, “There is suspicion that Mr. A deliberately reported wages at the minimum wage level, but if there are no personal assets under Mr. A’s name, legally there is nothing that can be done other than payment reminders,” and added, “We are seeking ways to recover the additional collection amount by consulting with lawyers.”

Mr. A said, “I have no assets under my name, so I told Buyeo County to seize whatever they can,” and added, “Due to the lack of patients after COVID-19 and hospital deficits, I am receiving minimum wage, and I have never deliberately embezzled assets.”

He also added, “I am personally involved in a lawsuit, and once it is concluded, I plan to fully pay the additional collection amount.”