Horrific corruption: A public servant pocketed as much as 5.8 billion won of taxpayer’s money by stealing the personal data of more than 100,000 citizens held by the government

2014-02-06 17:18

Horrific corruption

A public servant pocketed as much as 5.8 billion won of taxpayer’s money by stealing the personal data of more than 100,000 citizens held by the government. Surprisingly, the official, surnamed Choi, mobilized his brother, daughter and other relatives in this ugly case of fraud.
The incident illustrates the severity of corruption throughout our public sector and comes as more of a shock because it came to light as the entire nation is reeling from the fallout of a recent massive data theft incident involving credit card companies.
Yeongdeungpo Police Station in Seoul has requested arrest warrants for Choi, a mid-ranking official at the Ministry of Employment and Labor, and his younger brother. Choi is suspected of pocketing government subsidies intended for small companies after illegally obtaining the personal information of the intended beneficiaries.
Choi allegedly let his younger brother set up five corporations in the names of his family members and approached small-business owners ― using the illegally obtained data ― to persuade them to let him apply for subsidies on their behalf. Choi could freely use the ministry’s online employment information system because his responsibilities included granting authority to other staff members to access the database.
Choi and his accomplices let the small-business owners receive a total of 19 billion won in subsidies through this method and received 5.8 billion won, 30 percent of the subsidies, as commission.
It’s rather shocking that the labor ministry was unaware of this fraudulent scheme for more than five years. Ominously enough, the latest string of corruption cases involving government officials and employees at state firms may not be personal aberrations but structural problems caused by lax public discipline.
The incident also raises concern about the loose management of personal data held by government agencies. Who can guarantee similar incidents won’t take place elsewhere? The government needs to do housekeeping more faithfully before chiding private companies over data leaks.
At a time when the national welfare budget has surpassed 100 trillion won, it’s disheartening to see government subsidies wasted like a bottomless pit due to chronic corruption. It’s for this reason that President Park Geun-hye ought to renew her resolve to combat corruption.
It’s essential in this regard for the National Assembly to approve the so-called Kim Young-ran law, which envisions jailing public officials who receive 1 million won or more in bribes for up to three years ― regardless of whether the money is given in return for favors, during the ongoing session.
This latest corruption case should serve as an occasion to strengthen our security system for civil servants handling personal data. More importantly, it’s necessary to review across the board how government units and public organizations are managing private data and come up with supplementary measures.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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