"Direct Supplementary Investigation to Uncover Organized Crime and Additional Crimes"
5 Arrested and Indicted, 5 Indicted Without Arrest
[Asia Economy Reporter Kim Daehyun] Ten members of an organized group, including a former banker turned financial broker and a disguised journalist, were arrested by the prosecution on charges of committing loan fraud against self-employed individuals by issuing false tax invoices. The investigation revealed that this was a systematically conducted loan fraud exploiting loopholes in the financial system during the COVID-19 period.
On the 25th, the Busan District Prosecutors' Office Tax and Health Crime Division (Chief Prosecutor Park Gwanghyun) announced that it had indicted the loan fraud group members on charges including fraud and violation of the Tax Offense Punishment Act. Among the ten members, five, including financial broker A (55), a former banker, and disguised journalist B (39), were detained and indicted, while five others, including those responsible for issuing sales documents, were indicted without detention.
They were indicted for deceiving financial institutions with sales documents created using false tax invoices worth approximately 20 billion KRW over about three years from April 2019, obtaining a total loan amount of over 3.2 billion KRW under the pretext of loans for self-employed support projects.
Some members of the group are also accused of issuing and receiving false tax invoices worth about 2.3 billion KRW under the name of business entity C over a period of about two years from October 2017.
The Busan District Prosecutors' Office confirmed the existence of the real perpetrators and uncovered additional crimes through supplementary investigations, including a comprehensive review of criminal case records involving dozens of companies that received false tax invoices in the case referred for violation of the Tax Offense Punishment Act.
A representative of the Busan District Prosecutors' Office stated, "Through thorough direct supplementary investigations, we uncovered the presence of a professional document handler disguised as a journalist behind the scenes," and explained, "We identified that the true purpose of issuing false tax invoices was an organized 'self-employed support project loan' fraud involving even a former banker turned financial broker."
They added, "The 'self-employed support project loan system' implemented in response to the COVID-19 crisis had loopholes, such as financial institutions conducting only formal interviews without on-site inspections, not verifying business locations unexpectedly, and failing to confirm the companies issuing the tax invoices."
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