American Funeral Homes Are Not The Only Ones Who Have Embezzled Money

April 1, 2010
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image KOREA – An investigation is widening into allegations that a family owning the country’s largest funeral services company had embezzled a large amount of money from the firm.

Prosecutors are expected to seek arrest warrants for at least one of them.

The Busan Prosecutors’ Office said it raided 16 offices of the company, Boram, in Seoul and Uijeongbu. It also raided the home of the company president Choi Chul-hong in Seoul.

Investigators confiscated computer files and accounting books to look for suspicious financial transactions, the prosecution said. Choi’s elder brother was recently arrested for his involvement in the scandal.

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The president, who also has a controlling stake in 16 other companies, is now in the United States with his family. The prosecution will attempt to extradite him.

The company head is suspected of purchasing real estate for his own use with corporate funds.

“Among buildings he purchased in recent years using corporate funds were two hotels in Busan. The buildings are owned by his family, not the company,” said a prosecutor familiar with the investigation. “The amount of money embezzled is estimated at 10 billion won ($8.85 million).”

The company has promoted itself as the country’s largest and oldest funeral services provider, presiding over more than 12,000 ceremonies on an annual basis.

According to its Web site, it was established in 1991. Around 750,000 people have subscribed to the company for a full package of funeral services, it showed.

Its commercials featuring a famous actor were also attributable to its emergence as the top company of this kind.

The funeral services industry is booming in Korea as the population of senior citizens has rapidly increased thanks to improving medical science and living conditions.

At the same time, the emergence of ill-prepared companies has created a variety of side effects. For that reason, the Fair Trade Commission (FTC) will prohibit the operation of funeral service companies with capital of less than 300 million won starting March next year.

According to a revised law on installment transactions, including a new registration system for funeral firms, only companies with capital of 300 million won or over will be allowed to register with provincial governments from September this year.

Service providers will also be asked to disclose their business information at consumers’ requests.

More than 62 percent of the 281 local funeral service firms were capitalized at less than 100 million won as of 2008, the fair trade regulator said.

Source: KoreanTimes.co.kr

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