Gangnam orthopedic hospital faces allegations of ‘45 billion won stem cell storage fraud’... Seoul Metropolitan Police Agency launches direct investigation

[Financial News] The Seoul Metropolitan Police Agency has launched a direct investigation into allegations that an orthopedic hospital in Seocho-gu, Seoul, defrauded patients of storage fees totaling tens of billions of won by promoting a service that stored their stem cells for later use in treatment.
According to police and other sources, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency’s Metropolitan Investigation Unit has been questioning Lee Je-il, a lawyer and co-chair of the legal committee at the Min-saeng Economy Research Institute, as a complainant since 10 a.m. on the 10th.
Last September, the Min-saeng Economy Research Institute filed a complaint against the hospital director, A, the cell storage company, and the company’s former and current heads, alleging fraud and other offenses under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.
The complainant’s side alleges that they operated what they called a “cell banking” service, storing cells taken from patients’ fat tissue and supplying them back to the hospital when needed for use in treatment. However, the complainant’s side says the cell storage company had not obtained approval for a cell-processing facility or a license to operate a business managing human cells and related materials, both required to supply cells to medical institutions, and that no cells were actually shipped out.
The complainant’s side estimated that the total could amount to as much as 45 billion won, based on the company’s statement on its website that it had more than 15,000 storage customers and a storage fee of about 3 million won per person.
The case was initially assigned to Bangbae Police Station in Seoul, but was transferred to the Seoul Metropolitan Police Agency after concerns were raised at last month’s parliamentary audit that the investigation had been delayed for an extended period, among other criticisms.
At today’s questioning, the complainant’s side plans to request compulsory investigative measures, including searches and seizures of patient lists and storage-contract documents.[email protected] Choi Seung-han Reporter