Prosecutors said Sunday they have brought an additional fraud charge against the owner of a mid-sized home appliance maker who allegedly bribed financial authorities to conceal a massive loan scam.

In November, Park Hong-seok, 53, and two other Moneual executives were indicted on charges of filing false trade reports on home theater PCs worth 1.2 trillion won ($1.1 billion) for the last seven years. The company was declared bankrupt last month.

After wrapping up a month-long investigation, the Seoul Central District Prosecutors' Office said it has decided to press additional charges against Park, alleging that he borrowed 3.4 trillion won from banks by keeping up this facade from October 2007 to last September. He has yet to pay back 550 billion won to these 10 banks, prosecutors said.

Not only did Moneual pretend to export computers, it also jacked up the price of these hypothetical computers by at least 100-fold to between 2-3 million won, prosecutors said.

Park also faces charges of over-reporting Moneual's sales and net profit by a combined 2.7 trillion won.

Prosecutors believe Moneual initially reported it exports via KT ENS, an affiliate of South Korea's telecom giant KT Corp., but started doing so itself as the loans ballooned.

They also believe Park and the two executives bribed export and tax authorities around 2012 to evade scrutiny. Prosecutors allege that the three spent about 860 million won to this end and succeeded at stretching Moneual's insurance and loan limits by tens of millions of won.

Prosecutors said Moneual appears to have been able to do this because authorities never checked to see if their statements were true. They called for legal revisions to prevent similar scams. (Yonhap)