CEO indicted for embezzling 200 million won in subsidies after prosecutor-led probe

A company CEO has been arrested and indicted for allegedly embezzling around 200 million won (approximately $145,000 USD) in government subsidies through fraudulent means. The prosecution initiated a thorough supplementary investigation after initial police work was deemed insufficient.

The CEO, identified only by the surname 'K,' is accused of misappropriating subsidies from organizations including the Small and Medium Business Administration, the Korea Technology and Information Promotion Agency for SMEs, and the Ulsan Information Industry Promotion Agency. The alleged fraud occurred between December 2018 and May 2020.

In addition to subsidy fraud, 'K' faces charges of embezzlement for allegedly transferring approximately 66 million won (about $48,000 USD) to his personal accounts. This was reportedly done by creating fake employment for his sister and nephew, paying them salaries that were then funneled back to him.

The case highlights a significant gap in the initial police investigation. Prosecutors twice requested supplementary investigations in December 2023 and March 2024, focusing on account transaction details and interviews with witnesses. However, these requests were reportedly not fully addressed by the police, prompting the prosecution to conduct its own in-depth investigation.

Through its own investigation, which included tracing bank accounts and executing search warrants on business offices and tax agencies, the prosecution secured evidence and testimony from 'K' and other witnesses. This led to the issuance of an arrest warrant for 'K' and his subsequent indictment on June 29. The prosecution also obtained statements from accomplices, solidifying the case against the CEO.