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Franchise Company Arrested for Fraud in Newly Built Shopping Mall

Delivery time2023-10-09 22:25

(Suwon = Yonhap News) Reporter Kim Sol = The representative of a franchise company that received subsidies from a developer in exchange for providing a food court in a newly built shopping mall and then closed the business without proper operation was handed over to the prosecution under arrest.

Panoramic view of Gyeonggi Southern Police Agency

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The Gyeonggi Southern Police Agency’s Anti-Corruption and Economic Crime Investigation Unit announced on the 9th that it arrested and transferred Mr. A, a man in his 50s, on the 26th of last month on charges of violating the Act on Aggravated Punishment of Specific Economic Crimes (fraud).

Mr. A received 2.7 billion won in interior design subsidies from the mall developer in 2020 under the condition of opening a store in a newly built shopping mall in Eungye District, Siheung City and creating a food court, but is accused of not properly fulfilling the contract.

It was found that Mr. A, who had signed a 5-year lease contract for 50 rooms in this shopping mall, received subsidies by offering to build a food court under his franchise brand and help with sales during that period.

However, it was found that among the 50 rooms that Mr. A had signed a lease for, only some companies opened and the rest did not operate at all. Businesses that had opened also closed down within a few months.

Afterwards, he gathered several small business owners and re-leased the vacant space, saying, “I will guarantee the rights,” but it is said that they also closed their stores soon after.

It was confirmed that Mr. A used only part of the subsidy he received for interior decoration costs, and used the rest for personal purposes or to make up for deficits at other businesses.

At the end of last year, commercial owners filed a complaint against four people, including Mr. A and three developers of the developer, to the Siheung Police Station, claiming that they had suffered losses due to this situation, and the Gyeonggi Southern Police Agency took over the case in February and has been investigating it.

During the investigation, the police found out that the developer officials had also been deceived and suffered damage by Mr. A, and arrested Mr. A last month and handed him over to the prosecution.

In addition, Mr. A was found to have been criminally booked on charges of committing similar crimes at several shopping malls in Seoul and Incheon.

A police official said, “Mr. A made a statement to the effect that ‘we were unable to conduct business properly due to management difficulties caused by COVID-19,’ but we determined that he had intentionally deceived the developer and applied related charges.”

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2023/10/09 22:25 Sent

2023-10-09 13:25:28
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