Nineteen incumbent and former officials of a state-funded sports agency have been implicated in an embezzlement scheme involving corporate funds, police said Wednesday.

The suspects include Jung Jung-taek, former chairman of the Korea Sports Promotion Foundation; the incumbent chief secretary, surnamed Kim; and 17 other officials. The KSPO is a state-owned company that uses taxpayers’ money with the approval of the Ministry of Culture, Sports and Tourism.

Ex-chairman Jung, 69, has been booked without detention on charges of pocketing funds worth more than 290 million won ($263,000) from July 2011 to April 2014 via irregular bookkeeping.

Two suspects ― Kim, 53, chief secretary in charge of public communications and the other official, aged 47 ― were taken into custody for allegedly embezzling 290 million won and 116 million won, respectively.

“Kim and the other official mostly engaged in the practice through Jung’s instructions. (More than 10) minor staff were also pressured to take part,” said an investigator.

Some of the suspects reportedly used the company funds to pay for family trips, credit cards, entertainment and clothing. Later, some staff were found to have been ordered to rig accounting books.

According to police, ex-chief Jung told investigators that the practice had been commonplace in the industry.

Jung was a close confidante of former President Lee Myung-bak and served as the leader of conservative advocates the New Right Alliance.

The National Police Agency is considering widening the scope of the inquiry into the misappropriation of taxpayers’ money by investigating major state-controlled firms.

The KSPO raises funds through taxes levied on bets made through Sports Toto (which covers soccer, baseball, basketball, volleyball, golf, and the Olympics), cycle racing and motorboat racing, as well as a portion of licensed gambling revenues. Another source of income is its operation of Seoul Olympic Parktel in southern Seoul.

The KSPO is required to use these funds to support a variety of businesses or organizations to promote sports activities for the public, sports for the disabled, and to increase the number of international sports exchanges.

By Kim Yon-se (kys@heraldcorp.com)