‘Gageodo breakwater corruption’ former and current employees of Samsung C&T, first trial suspended sentence

The cost of restoration work for typhoon damage at Gageodo Port in 2016 was inflated by the Ministry of Oceans and Fisheries.

Eight people, including former and current Samsung C&T officials, who were handed over to trial on charges of stealing the national budget by inflating the construction cost of the Gageo Island breakwater in Shinan-gun, Jeollanam-do, were sentenced to suspended prison sentences in the first trial.

On the 22nd, the Seoul Southern District Court's Criminal Agreement Division 11 (Chief Judge Jang Chan) held a sentencing hearing for four former and current executives and employees of Samsung C&T Corporation, including Mr. Cho, a former employee of Samsung C&T, and four former and current executives and employees of a design supervision company, who were indicted on charges of fraud and hierarchical obstruction of official duties under the Act on the Aggravated Punishment of Specific Economic Crimes.

On this day, the court sentenced three people, including Mr. Cho, Mr. Ko, and Mr. Kim, to three years in prison and five years of probation. The remaining five people who were also brought to trial were each sentenced to 2 years and 6 months in prison and 4 years probation.

During the typhoon damage restoration work at Gageodo Port in March 2016, they claimed that "we found soft ground and additional construction is necessary," submitted a plan with falsely inflated construction costs to the Ministry of Oceans and Fisheries, and were put on trial on charges of concluding a contract worth 34.7 billion won and pocketing the money.

They were found to have increased construction costs by reducing the number of monthly working days at the time of construction, thereby increasing the construction period, and inflating the barge rental price required for construction and reflecting it in the design documents.

It was also found that a false comparison estimate was submitted to make it look like a normal design estimate comparison was made at the time.

On this day, the court pointed out, "This is a case in which the defendants from the construction company and the design company manipulated the construction cost calculation details and comparative estimates and submitted false revised detailed design documents to the ordering office," and pointed out, "The guilt is not light, including interfering with the legitimate performance of official duties by officials in charge of the ordering office and defrauding a significant amount of money."

He continued, "Separating design and construction in government-funded construction is intended to ensure transparency through mutual checks and to ensure appropriateness of construction costs and budget savings, but (the defendants) unfairly embezzled the national budget allocated with the people's precious taxes."

However, on this day, the court found them not guilty of fraud charges under the Special Police Act.

Chief Judge Jang said, "The difference after deducting the legitimate construction costs should be viewed as a profit obtained by defrauding Samsung C&T, rather than the entire 34.7 billion won paid to Samsung C&T. However, based on the submitted evidence alone, it is difficult to determine whether the difference is more than 500 million won or 5 billion won, which is the standard for applying the Special Police Act."

The court took into account the fact that the defendants did not gain personal benefit from the crime and had no history of similar crimes when sentencing.