The Daegu Regional Employment and Labor Office said on the 17th that it had arrested a business owner, identified only as A, on charges of violating the Employment Insurance Act by fraudulently claiming unemployment benefits and other subsidies.
A is accused of recruiting 57 fake workers with the help of brokers. Operating five businesses in Daegu, A worked with four brokers to assemble the phantom workforce over seven years, from March 2019 through February this year. A then filed false reports on the workers' employment insurance eligibility and daily work records to collect unemployment benefits.
The investigation confirmed fraudulent claims totaling about 580 million won ($417,000). That included roughly 540 million won in unemployment benefits, about 20 million won in employment retention subsidies and about 20 million won in special hiring incentives for young workers.
A divided the roles with the brokers, leaving recruitment to them while providing information on the businesses. The labor office said the group carried out the scheme in an organized manner over an extended period.
After the investigation began, A coordinated statements with accomplices via messaging apps including Telegram and destroyed evidence. The labor office concluded that A posed a high flight risk, citing an unstable residence and no indication of any willingness to return the fraudulent payments.
The labor office consulted with the Daegu District Prosecutors' Office and requested an arrest warrant, which the court issued the previous day.
"Unemployment benefits are a vital fund that supports the livelihoods of the jobless and helps them find work again," said Hwang Jong-chul, head of the Daegu Regional Employment and Labor Office. "We will track organized fraud that abuses the system to the end and take stern action in accordance with the law and principle."
