Fabricated Orders at Gwangju Major Corporation Plant
Swindled Partner Company to Divert Payments
An employee of a large corporation who siphoned off around 2.5 billion won in company funds by fabricating transactions for materials with a partner company and then lived a lavish lifestyle has been sentenced to a heavy prison term in the first trial.
According to the legal community on February 25, the 12th Criminal Division of the Gwangju District Court (Presiding Judge Park Jaesung) sentenced Mr. A (54), who was indicted on charges of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (breach of trust) and the Act on Regulation and Punishment of Criminal Proceeds Concealment, to seven years in prison.
Mr. A is accused of having submitted a total of 43 false material orders between October 2021 and November 2024 while he was in charge of material ordering work at a manufacturing site of a large corporation in Gwangju, thereby causing the company to pay 2.49 billion won in transaction amounts to a partner company and then embezzling the money. Including about 210 million won in tax-related expenses, the total damage suffered by the company amounts to 2.7 billion won.
The investigation found that Mr. A also concurrently handled material inspection work and meticulously abused his internal system authority, which allowed him to arbitrarily change inventory quantities in the computer system. He processed incoming materials supplied by partner companies as if they had been received, without any verification of the actual quantities.
Afterward, Mr. A deceived the partner company by saying, "There is Company B, which is not an official partner company authorized to reprocess imported materials, but could you receive the payment on its behalf and pass it on?" and requested a "detour payment of the transaction amount." Company B, which received the entire payment for the materials made by the large corporation and then transferred it back, turned out to be a company registered under the name of Mr. A's wife.
During the trial, Mr. A claimed that his motive for the crime was "supporting his children," but it was revealed that he had in fact squandered the embezzled large sum on repaying personal debts, signing a commercial property lease, purchasing presale apartment rights, and leasing an expensive imported car.
The court stated, "The defendant bears a very heavy degree of culpability, as he used his position and authority to place false material orders and to manipulate records to make it appear as though the materials had been used in product manufacturing," and added, "In determining the sentence, we took into account that most of the damage amount has been completely spent and no restitution has been made at all."
Mr. A has appealed the first-instance ruling, claiming that the sentence is unfair, and the second-instance trial is scheduled to be held at the Gwangju High Court.
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