Former executives of a North Korea support organization who received subsidies from Jeollanam-do Province under the pretext of providing salt aid to North Korea and then handed over part of it to North Korean officials have been sentenced to three years in prison.
According to legal circles on April 19, the 32nd Criminal Agreement Division of the Seoul Central District Court (Presiding Judge Ryu Kyung-jin) sentenced Mr. Eom and Mr. Choi to three years in prison each on charges of embezzlement, violation of the Local Government Subsidy Management Act, violation of the Foreign Exchange Transactions Act, and violation of the Act on the Regulation and Punishment of Criminal Proceeds Concealment. The court also ordered Mr. Eom to forfeit about 67.81 million KRW (about 45,900 USD) and Mr. Choi about 60.99 million KRW (about 41,300 USD).
Previously, Mr. Eom claimed that he was only responsible for planning tasks such as writing proposals and was not involved in fund management or execution, nor did he participate in embezzlement. Mr. Choi also stated that he was merely in charge of transportation services for the North Korea salt project and did not participate in embezzlement.
The court determined that the defendants inflated the price of salt in the documents submitted to Jeollanam-do Province, writing 240,000 KRW (about 163 USD) per ton, while internal documents of the project team listed the price as 170,000 KRW (about 115 USD) per ton. This was seen as an attempt to pocket the difference.
The court also noted that as soon as they received the service fees, Mr. Eom transferred 12 million KRW (about 8,130 USD) to his account under the pretext of salary, and Mr. Choi transferred 22 million KRW (about 14,900 USD) to his account under the pretext of loan repayment, both using the funds for personal purposes.
Regarding the charges of violating the Act on the Regulation and Punishment of Criminal Proceeds Concealment, the court found the defendants guilty, citing that they knew the funds were entrusted for the North Korea salt project, withdrew the money in cash and transferred it through multiple accounts, and disguised the source of the embezzled funds to make them appear legitimate.
Mr. Eom was also found guilty of violating the Foreign Exchange Transactions Act. The court stated that Mr. Eom knew he was paying the funds to the North Korean Embassy, which is under the State Affairs Commission of North Korea, a target of financial sanctions.
The court ruled that the amount embezzled by the defendants amounted to about 500 million KRW (338,800 USD), with 470.05 million KRW (about 318,000 USD) being subsidies received from Jeollanam-do Province for the North Korea salt project, which is essentially taxpayers’ money.
The court added that the defendants made false reports to Jeollanam-do Province about purchasing salt and disguised the facts regarding the acquisition or disposal of criminal proceeds.
Furthermore, the court emphasized that inter-Korean exchange and cooperation should be based on the rule of law, but Mr. Eom arbitrarily paid foreign currency to the North Korean Embassy without obtaining permission from the Governor of the Bank of Korea.
However, the court viewed Mr. Choi’s embezzlement related to the North Korea salt project and embezzlement related to the North Korea flour project as separate crimes rather than a single continuous crime. As a result, the court only recognized embezzlement in the course of business for Mr. Choi, not embezzlement under the Special Economic Crimes Act.
Mr. Eom and Mr. Choi are accused of receiving 475 million KRW (about 321,800 USD) in subsidies from Jeollanam-do Province for North Korea salt aid from November 2019 to July 2021 by falsely claiming to have purchased salt with forged evidence, and then using 470.05 million KRW (about 318,500 USD) for personal expenses (charges of embezzlement and violation of the Local Subsidy Act).
They are also charged with transferring part of the subsidy, 200,000 CNY (about 29,300 USD at the exchange rate at the time), to a North Korean Embassy employee in Beijing, China, twice in April 2020 through a hawala-like system (charges of violating the Foreign Exchange Transactions Act and the Act on the Regulation and Punishment of Criminal Proceeds Concealment).
Mr. Choi is also accused of embezzling a total of about 67.98 million KRW (about 46,000 USD) by inflating freight transport contracts with a company where he was the representative, in relation to the North Korea flour project.
