▲ The South Korean national flag and the prosecution flag
A loan broker has been indicted on charges of fraudulently obtaining 197 billion won in credit guarantees from the Korea Credit Guarantee Fund (KODIT) under the pretext of opening hospitals and pharmacies.
According to legal circles on July 7, the Seoul Central District Prosecutors' Office (Criminal Division 5, led by Chief Prosecutor Jung Jae-shin) indicted the broker, identified as A, on charges including fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes on the previous day.
A is accused of submitting forged balance certificates or fake medical equipment sales contracts under the names of 278 doctors and pharmacists between April 2022 and November 2024 to illicitly obtain preliminary startup guarantee certificates from the Korea Credit Guarantee Fund.
Investigations revealed that A established paper companies, drafted false medical equipment sales contracts in the companies' names, and forged balance certificates using Photoshop.
The preliminary startup guarantee is a system that issues guarantee certificates of up to 1 billion won to prospective entrepreneurs in professional fields.
A exploited the fact that the guarantee review process was formalistic and that bank loan screenings were also conducted loosely.
In fact, A's criminal activities went undetected for two years and eight months.
A reportedly approached medical professionals in need of loans at clinic opening seminars, introducing himself as a "clinic opening consultant" or a "bank loan counselor."
A is also charged with embezzling 56 billion won from 80 medical professionals who received loans by deceiving them into believing that "the loan funds needed to be sealed according to Korea Credit Guarantee Fund regulations."
The embezzled funds were invested in illegal futures trading.
Using the personal seals and seal registration certificates of doctors and pharmacists obtained during the guarantee issuance process, A also forged loan agreements to apply for loans from private lending firms.
Initially, the police had referred A's case to the prosecution by splitting it into 270 separate counts.
Although the prosecution requested supplementary investigations, stating that the crimes should be viewed as a single comprehensive offense, the police reportedly failed to properly comply.
The prosecution consolidated all of A's crimes and conducted supplementary investigations, including face-to-face interviews with 80 doctors and pharmacists and an analysis of account transaction records, before directly arresting and indicting A.
During the supplementary investigation, it was newly discovered that A had pocketed 1.957 billion won in bank loan brokerage fees from 151 doctors and pharmacists.
The prosecution decided not to indict 276 doctors and pharmacists who were referred by the police as accomplices, confirming that they had been used by A or had only passively participated in the crime.
The prosecution also took into account that 179.6 billion won of the loan funds had been repaid and that some of the medical professionals were also victims of fraud.
However, two doctors were indicted without detention, considering that they used the preliminary startup guarantee loans for purposes other than opening clinics and failed to repay the Korea Credit Guarantee Fund even after the fund covered the loans due to the closure of their hospitals.
The Seoul Central District Prosecutors' Office stated, "We will continue to strictly punish those who embezzle public funds, as such acts undermine the public nature and soundness of public financial resources."
(Photo: Yonhap News)
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