South Korean Civil Servant ‘Stole Flood Relief Funds to Buy Crypto’

A South Korean civil servant found guilty of stealing flood relief funds and donations to fund a personal crypto buying spree is set to face further punishment.

Per Yonhap News , the Board of Audit and Inspection explained that an unnamed grade-six civil servant in Cheongju, North Chungcheong Province, used the city’s official mayoral stamp to open a bank account in the name of the Cheongju City Hall.

Public Worker ‘Stole South Korean Flood Relief Donations’

The official was jailed for five years in December last year. But the board, which oversees public bodies in South Korea, has the power to dispense further punitive measures, such as reduced pensions and benefits .

The Public Prosecutor’s Office in Cheongju, South Korea. (Source: YonhapTVNews/YouTube/Screenshot)

The board said the civil servant then used this account to siphon off 497.16 million won ($341,930) in public funds.

The money included public organization funds, city project budget expenses, and local subsidies, the board added.

The civil servant then used the accounts to steal money from a donations platform. The platform had been set up to help rebuild flood-hit areas.

North Chungcheong Province suffered from severe flood damage in July 2023 following a period of heavy rainfall.

Many parts of South Korea were devastated by flood damage in July 2023. (Source: JTBC News/Screenshot)

Official Seals ‘Mishandled’

The board ruled that the civil servant used the accounts “on 45 occasions over approximately six years from November 2018 to May 2024.”

The accused then reportedly transferred the money to private accounts and then used the money to buy unnamed cryptoassets.

The board said the accused also embezzled funds for a range of projects by “falsely posting project expenses” on a city-run financial management platform.

The civil servant then “secretly processed electronic approvals” on behalf of their superiors to ensure the money kept flowing into the account.

In South Korea, companies, public bodies and individuals use official seals to confirm the final details of financial transactions.

Many public organs require multiple levels of personal approval for financial operations. Thus, in many civil service officers, a single staffer manages and ensures the security of all employees’ seals.

The Public Prosecutor’s Office in Cheongju, South Korea. (Source: YonhapTVNews/YouTube/Screenshot)

A Debt-fuelled Crime?

The board found that the accused gained access not only to several Cheongju City Hall officials’ seals, but also seals belonging to “third-party business operators.”

The accused also used the embezzled funds to “pay off personal debts,” possibly accrued from bad crypto investments.

The board ruled that the City should remove the accused from their post. It also asked local prosecutors to launch a case against the official for “embezzlement and other criminal charges.”

The case is currently active in the High Court, which has the power to overturn or extend the District Court’s original verdict.

The board also handed out reprimands and punishment recommendations to other Cheongju officials, including the mayor.

It noted that the mayor’s office had been “negligent” about the whereabouts of its seal. It also hit out at the City Hall’s accounting and security management teams.

Board Warns City Hall

The board noted that the seal was “usually left unattended, without any safety measures.”

It also asked Cheongju City Hall to “take disciplinary action” against its seal manager and issued four of the accused’s direct superiors with official warnings.

Many parts of South Korea were devastated by flood damage in July 2023. (Source: JTBC News/Screenshot)

The board also issued City Hall an “institutional warning,” instructing it to work harder to “prevent embezzlement cases” and strengthen its detection protocols.

Earlier this week, prosecution officials in Seoul arrested the market maker Jon Bur Kim on charges relating to altcoin price manipulation and crypto fraud.