They survived state abuse and won compensation. Then they lost it all.

BUSAN — A promise of marriage and doubled returns on an investment vanished after a victim of state abuse lost 1.3 billion won ($966,000) to a duplicitous acquaintance who disappeared with the money.

The sum was the victim's entire savings, including 1.17 billion won in state compensation for past state violence as well as retirement pay and savings borrowed funds.

The victim was a 60-year-old surnamed Jeong, a survivor of Deokseongwon, a child welfare institution in Busan where abuse was perpetrated for decades from the 1950s through the 1980s, including beatings, forced labor, sexual assault and illegal adoptions. 

Jeong was confined at Deokseongwon for 13 years before leaving after graduating from high school.

Jeong received 1.17 billion won in state compensation on Feb. 26, the third-largest amount among 42 Deokseongwon survivors who were awarded restitution from the state. Just over two months after receiving the compensation, he was persuaded by an acquaintance to hand over money on three occasions.

Jeong’s case is not a unique one, as survivors who receive large compensation payments can struggle to manage the money without adequate support.

The roughly 1.3 billion won included the entire compensation payment, 11.85 million won in retirement pay, 94 million won in savings, 26 million won borrowed from an insurance company and 8 million won from two months’ wages.

“I can barely afford the rent on my studio apartment and may have to move into a gosiwon [small private rooms with shared bathrooms],” Jeong said. He has filed a police complaint against the acquaintance on allegations of fraud and deception involving a promise of marriage.

A 60-year-old survivor of Brothers Home surnamed Shin also exhausted a large state compensation payment within months of receiving it. The case involving Brothers Home dates back to the 1970s and 1980s, when tens of thousands of disabled or homeless people were rounded up by police and confined in a state-sanctioned welfare facility in Busan, only to be subjected to forced labor, beatings and other forms of abuse.

Shin entered Brothers Home in 1978 and spent six years and 11 months there. The 510 million won in state compensation received last December was the first time Shin had ever possessed such a large sum of money.

Shin gave 60 million won as a tithe to a church he regularly attended and donated 20 million won each to two pastors. Shin also provided another church with 50 million won worth of clothing and other goods for people in need and sent money to acquaintances, including a missionary in the Philippines.

In less than three months, 500 million won was gone. The only money Shin spent personally was to move into an officetel, a unit in a building zoned for commercial and residential purposes, with a 10 million won deposit and monthly rent of 450,000 won.

“When I entered numbers into a banking app, I didn’t really have a sense that I was sending huge amounts of money, even when I was transferring tens of millions of won at a time,” Shin told the JoongAng Ilbo by phone. “After leaving Brothers Home, I spent time living on the streets and never had much of a chance to lead a normal social and working life, so I never developed much of a sense for managing money.”

Shin’s only income now is 1 million won a month in basic livelihood benefits.

“I donated the money voluntarily, so I wasn’t scammed, but this wouldn’t have happened if I had received the money in installments like a pension,” Shin said.

Another survivor of an institutional confinement facility who has an intellectual disability received 1.3 billion won in state compensation, only to suffer financial losses after family members who had long been out of contact suddenly reappeared.

The family members sought to purchase a home in the survivor’s name and used the survivor’s money for the down payment. When the deal fell through, the money was not recovered. Further losses were prevented only after the survivor, with help from people nearby, placed the assets under an asset management service operated by the National Pension Service.

The state has begun paying substantial compensation for human rights abuses committed decades ago, but critics say there are insufficient safeguards to help survivors safely manage large lump-sum payments and rebuild their lives.

“The state cannot forcibly manage the asset rights of adults,” said attorney Lim Jae-sung, who represented Deokseongwon survivors. “Financial education is being provided, but with fraud cases continuing to occur, safeguards are needed to supplement the lump-sum payment system.”

Ahn Jong-hwan, head of an association of Deokseongwon survivors, also noted that many of the survivors who were confined in institutions for long periods have difficulty managing their finances and navigating life in society.

“Support should not end with the payment of compensation,” Ahn said. “Survivors need help building stable lives through measures such as public trusts.”

The Busan city government currently provides practical legal and asset-management education to survivors of institutional confinement facilities who have received state compensation.

“There is no legal basis for the government to compel people to have their assets managed,” an official from the Busan city government’s autonomous administration division said. “A special bill that includes public trusts, adult guardianship and links to property management services is pending in the National Assembly.”

Rep. Nam In-soon of the Democratic Party introduced a special act for victims of human rights violations at institutional confinement facilities in March. The bill would allow the assets of state violence survivors who have difficulty managing their compensation due to reasons like old age and disabilities to be entrusted to a public trust institution.

“A public trust system is a mechanism to ensure that state compensation leads to meaningful recovery for victims of state violence,” Rep. Nam said.

Rep. Kim Yea-ji of the People Power Party has also introduced a special bill that would provide support for adult guardianship, property management services and the use of trusts.

Both bills seek to go beyond monetary compensation and support survivors in rebuilding their lives.

“The state must take responsibility until the end so that victims of state violence can safely manage their assets and rebuild their lives in their communities,” Rep. Kim said. “As the number of state compensation cases increases, institutional safeguards are urgently needed.”

BY LEE EUN-JI [[email protected]]