Police: Sham minister bilked companies of $2.5M

A man who passed himself off as a vice defense minister-designate was among seven people arrested on bribery charges in Seoul.

The scheme allegedly bilked 28 small and medium-sized-business owners of 2.8 billion won ($2.5 million) by selling them empty promises of help winning contracts to supply the military.

The Seoul Metropolitan Police Agency said yesterday that the man, named Heo, and six others opened a bogus company last year near the Defense Ministry building, and lured victims by claiming that the company had been granted the exclusive right to supply the ministry with goods ranging from food to construction materials and landscape architecture services.

In February, Heo allegedly told a beef importer surnamed Kim, 49, that he would soon be in charge of a new vice defense minister position that would be created after the Defense Acquisition Program Administration was merged with the Defense Ministry.

Heo reportedly told Kim that the only people who knew about the post were President Lee Myung-bak and Prime Minister Chung Un-chan, and it was being kept under wraps for fear the “appointment” would trigger strong opposition from military insiders. To bolster his claims, “Heo and his accomplices downloaded the Defense Ministry’s logo from the ministry’s press releases, which are easily accessible at the ministry’s Web site,” a police official said. “They used the logos to make bogus confidential documents look like they were genuine.”

Kim bought the story, and paid Heo 485 million won as a contract deposit, but not all the group’s attempts were so successful, police said; some of the business owners learned that the promises were fraudulent, and went back for hush money. Neither Kim nor the other business owners have been charged with offering bribes.

Heo has also been charged with hiring 164 college graduates and keeping them on staff without paying them for seven months. Heo allegedly told the workers that they would be given jobs in the Defense Ministry.

By Jeong Seon-eon, Kim Mi-ju [mijukim@joongang.co.kr]