A group of individuals who inflated software prices sold to the Ministry of National Defense, embezzled tens of billions of won from state funds, and laundered the money has been brought to trial.
On December 15, the Joint Investigation Team for National Fiscal Crimes at the Seoul Northern District Prosecutors’ Office (headed by Chief Prosecutor Lee Taehyup) announced that it had indicted 13 people, including the sales director of software manufacturer Company A, on charges of aggravated breach of trust, fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, and violations of the Act on Regulation and Punishment of Concealment of Criminal Proceeds. Among them, three individuals-including a sales manager with a significant role in the crime and the head of a shell IT company involved in money laundering-were indicted and detained.
From May last year to April this year, they allegedly embezzled 5.3 billion won (approximately 5.3 billion KRW) from state funds by exploiting database system upgrade projects commissioned by agencies and directly affiliated units under the Ministry of National Defense. They created a price gap between what the government paid and what was paid to Company A by fraudulently increasing internal discount rates or inflating the estimates submitted to the ordering agencies.
The embezzled funds were laundered through shell IT companies, and most of the criminal proceeds were squandered on overseas trips to Southeast Asia and entertainment expenses at domestic nightclubs.
The prosecution launched a compulsory investigation into the suspects in May, and, after forensic analysis of more than 70 electronic devices and tracking over 400 bank accounts, uncovered the full extent of the crime. During the investigation, authorities blocked additional money laundering activities involving approximately 1.5 billion won (about 1.5 billion KRW) in criminal proceeds and took measures to preserve and recover the defendants’ assets.
A prosecution official stated, "We will do our utmost to maintain the indictment in order to eradicate crimes involving the misappropriation and embezzlement of national fiscal resources, which cause significant harm to public finances," adding, "We will continue to respond strictly to all types of national fiscal crimes in accordance with the law and principles."
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