Seoul court upholds closure, name disclosure of daycare over subsidy fraud
Version 2: New outlets CBS NoCut News and Hankook Ilbo added a breakdown of the fraudulently claimed 118.09 million won into 98.04 million won in labour costs and allowances and 20.05 million won in childcare fees, along with details of the December 2024 closure and the following January’s publication decision and of the operators’ appeal.
In short
A Seoul court dismissed a lawsuit by the operators of a Gangdong-gu daycare center, ruling that the district was right to close the facility, recover fraudulently claimed subsidies and publish its name and the director’s name for three years. Investigators found about 118.09 million won was taken between 2022 and 2024 through false registrations of six childcare staff and of children, plus altered attendance records; Yonhap put the total at about 110 million won. The court held that the district’s unannounced on-site investigation was lawful because advance notice could have led to evidence being destroyed, and the operators have appealed.
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A Seoul court has dismissed a lawsuit by the operators of a daycare center in Gangdong-gu against the district chief over the facility’s closure and the publication of its name, ruling the measures lawful. Seoul Administrative Court Administrative Division 8, presided over by Judge Yang Soon-ju, rejected the claims of the former and current representatives and the former director, according to Yonhap, Seoul Economic Daily, Dong-A Ilbo, CBS NoCut News and Hankook Ilbo. [ 2 , 3 , 4 , 5 , 6 ]
The case began in 2024 with a complaint that children attending a daycare center in Hanam, Gyeonggi Province, were also registered at the Gangdong-gu facility. Yonhap reported the tip reached Gangdong-gu, while Seoul Economic Daily reported that Hanam City Hall received the complaint and forwarded it to the district. Gangdong-gu investigated the daycare’s subsidy claims for 24 months between 2022 and 2024 in October and November 2024, according to Seoul Economic Daily and CBS NoCut News. [ 2 , 3 , 5 ]
Investigators found the facility had falsely registered childcare staff and children and altered attendance records. Hankook Ilbo and CBS NoCut News reported the fraudulent total at about 118.09 million won: 98.04 million won claimed in labour costs and allowances through the names of six staff members, and 20.05 million won in childcare fees for children who did not attend or were recorded as present when absent. Yonhap put the total at about 110 million won. CBS NoCut News reported the daycare filled an infant class largely with falsely registered children to receive an incentive for opening and maintaining the class, and that children were recorded as leaving later than they did. The district also found that a person without childcare qualifications had been assigned as a homeroom teacher and that accounting documents such as invoices and receipts were not properly kept from 2023, according to Seoul Economic Daily. [ 2 , 3 , 4 , 5 , 6 ]
Gangdong-gu closed the facility, recovered the subsidies and revoked the director’s qualification in December 2024, and imposed penalty surcharges on the former and current representatives, according to CBS NoCut News. The following January the district decided to publish the disposition, the facility’s name and address, and the names of its representative and director for three years, along with the violations, the documents said. [ 2 , 3 , 5 , 6 ]
The operators sued, arguing that the investigation was carried out without prior written notice, that they were not told third parties such as parents were being questioned, and that the process was coercive, while also challenging the publication decision as procedurally flawed. The court held that written notice is normally required seven days before an investigation but that on-site oral notice is permitted when advance notice could lead to evidence being destroyed. It cited the daycare’s request to falsely registered staff to say they had worked there if the district called and, according to Yonhap and Hankook Ilbo, a former director’s offer of money to a parent to falsely register a child. [ 2 , 3 , 5 , 6 ]
Seoul Economic Daily reported the court found the plaintiffs had been notified about the publication decision and had submitted their views through representatives, so their procedural rights were sufficiently protected. Hankook Ilbo reported the court said the facility met all requirements for publication under the Infant and Child Care Act and that the district chief must publish in the manner the law prescribes. Yonhap and Hankook Ilbo reported the operators have appealed, and Yonhap said a second trial is under way. [ 2 , 3 , 6 ]
Why it matters
The ruling affirms that a district office can close a childcare facility and publicly name those involved without the usual seven-day written notice when it judges that evidence could otherwise be destroyed, a procedural point several outlets emphasised. It also shows the consequences attached to subsidy fraud findings — closure, repayment, a revoked director’s qualification and three years of public disclosure. The operators have appealed, so the outcome is not final.
Key facts
- Seoul Administrative Court Administrative Division 8, presided over by Judge Yang Soon-ju, dismissed the lawsuit; Newsis framed the ruling as confirming that the closure was lawful. [ 1 , 2 , 3 , 4 , 5 , 6 ]
- The case began in 2024 with a complaint that children attending a daycare center in Hanam, Gyeonggi Province, were also registered at the Gangdong-gu facility. [ 2 , 3 , 5 ]
- Investigators found the daycare fraudulently received subsidies between 2022 and 2024 by falsely registering childcare staff and children and manipulating attendance records. [ 2 , 3 , 4 , 5 , 6 ]
- Hankook Ilbo and CBS NoCut News reported the total at about 118.09 million won: 98.04 million won in labour costs and allowances claimed through the names of six staff members and 20.05 million won in childcare fees; Yonhap put the total at about 110 million won. [ 3 , 4 , 5 , 6 ]
- A person without childcare qualifications was assigned as a homeroom teacher, and accounting documents were not properly kept from 2023, investigators found. [ 2 , 3 , 5 , 6 ]
- The district closed the facility, recovered the subsidies, revoked the director’s qualification, imposed penalty surcharges and decided to publish the disposition and names for three years. [ 2 , 3 , 5 , 6 ]
- The court held that on-site oral notice instead of seven-day written notice was lawful because advance notice could have led to evidence being destroyed. [ 2 , 3 , 5 , 6 ]
- Yonhap and Hankook Ilbo reported the operators have appealed; Yonhap said a second trial is under way. [ 2 , 6 ]
Confirmed by several sources
- A Seoul court dismissed the lawsuit challenging Gangdong-gu Office’s closure of the daycare center and its decision to publish the facility’s and director’s names, ruling the dispositions lawful. [ 2 , 3 , 4 , 5 , 6 ]
- Investigators found the daycare fraudulently received subsidies through false registrations of childcare staff and children and altered attendance records. [ 2 , 3 , 5 , 6 ]
- Six childcare staff members’ names were used in the false registrations, with about 98.04 million won claimed in labour costs and allowances. [ 3 , 4 , 5 , 6 ]
- A person without childcare qualifications was assigned as a homeroom teacher. [ 2 , 3 , 5 , 6 ]
- The district closed the facility, recovered the subsidies, revoked the director’s qualification and ordered the disposition and names published for three years. [ 2 , 3 , 5 , 6 ]
- The court held that on-site oral notice during the investigation was lawful because prior written notice could have led to destruction of evidence. [ 2 , 3 , 5 , 6 ]
- A former director offered a parent money to falsely register a child, according to the court’s findings. [ 2 , 6 ]
- The operators have appealed the first-instance ruling. [ 2 , 6 ]
Still unclear
- The exact amount fraudulently received Yonhap reported about 110 million won, while Seoul Economic Daily, Dong-A Ilbo, CBS NoCut News and Hankook Ilbo reported about 118.09 million won; the documents do not reconcile the figures.
- When the first-instance ruling was issued Seoul Economic Daily and CBS NoCut News said the ruling came last August, while Yonhap described it as recent; Hankook Ilbo did not give a date.
- Whether any criminal case was brought over the subsidy claims The documents describe the administrative investigation and the court ruling but say nothing about criminal proceedings.
- The exact number of plaintiffs Yonhap and Dong-A Ilbo described a representative and others including a former director, while CBS NoCut News specified two former and current representatives and one director, and Seoul Economic Daily said three people sued.
What local media are saying
Timeline, local time
- Newsis, Yonhap and Seoul Economic Daily publish reports on the court ruling upholding the daycare’s closure and the publication of its name. [ 1 , 2 , 3 ]
- Dong-A Ilbo reports the ruling, stating that about 118 million won was taken in labour cost and allowance claims. [ 4 ]
- CBS NoCut News reports the ruling and gives a breakdown of the fraudulent claims, describing a December 2024 closure and a January publication decision. [ 5 ]
- Hankook Ilbo reports the ruling, splitting the total into 98.04 million won in labour costs and allowances and 20.05 million won in childcare fees, and notes the appeal. [ 6 ]