Absconding After Receiving Transportation Fees, Food Poisoning Scams... Fraudsters Preying on Self-Employed Businesses Run Rampant

Annual 5,000 Cases of Fraud and Extortion at 'Sangjeom'
Low Damage Amounts Lead to Underreporting Exploited

"I will work. Can you send me transportation expenses to get to the store?"

A, who runs a restaurant in Cheongju, Chungbuk, received this message last July from Eom (23), who lives in Ulsan, after posting a job opening for a kitchen staff. A was in urgent need of hiring, offering a salary of 3 million won and free accommodation, and readily agreed, saying, "Have a meal and come up," and sent Eom 50,000 won for transportation expenses.

However, after receiving the money, Eom left a text saying, "I will work hard," and disappeared. Eom was prosecuted for fraud, having swindled more than 10 million won from 160 self-employed business owners in a similar manner, and was sentenced to one year in prison last August.

B, who runs a sashimi restaurant in Jung-gu, Busan, received a distressing call on December 28 last year. Eom (38), who claimed to have contracted food poisoning and enteritis after visiting B's restaurant, threatened, "If you don't pay hospital bills and settlement money, I will report to the health center." Eventually, B sent Eom 170,000 won for medical expenses, but Eom had never actually visited B's restaurant.

Eom was indicted for extortion by calling restaurants nationwide, including Seoul and Busan, using this method and was sentenced to one year in prison on the 30th of last month. Eom extorted 2,415,780 won from 13 self-employed business owners under the pretext of medical and settlement fees, and there were 82 cases of attempted extortion.

Text message history between self-employed person A and Mr. Lee on July 2nd last year. The fraudster Mr. Lee, who received the remittance, soon cut off contact. [Photo by victim]

Fraudsters targeting small-scale businesses are rampant, causing suffering for small self-employed business owners. In crimes targeting self-employed individuals, the amount of damage is often small, so recovery of losses is rarely achieved.

Investigative agencies such as the prosecution and police do not separately compile crime statistics targeting self-employed business owners. However, according to the "National Commercial Crime Victim Survey" published by the Korea Institute of Criminology and Justice Policy in 2017, the estimated annual damage to self-employed business owners from fraud crimes was 423.96363896 billion won. This was the first domestic survey on crime damage targeting self-employed business owners.

At that time, the survey was conducted on 8,140 businesses nationwide (classified under the Korean Standard Industrial Classification as wholesale and retail trade, accommodation, and food service activities), and the industry with the highest victimization rate of property crimes was pubs (30.3%), followed by retail (27.8%), accommodation (21.7%), and restaurants (21.5%).

The scale of crimes experienced by self-employed business owners is presumed not to have changed significantly. According to the National Police Agency crime statistics on the 19th, fraud and extortion crimes occurring in "stores" numbered 5,446 in 2020, 4,427 in 2021, and 5,128 in 2022. Except for 2021, when social distancing was strengthened due to the COVID-19 pandemic, more than 5,000 crimes targeting self-employed business owners occurred annually.

One reason for the crimes is that self-employed business owners often do not report because the damage amount is small. Judge Hwang Hyung-ju of the Ulsan District Court's 2nd Criminal Division, who presided over Eom's case involving fraud against 160 self-employed business owners, stated, "It appears that the defendant continued the crime believing that victims would not report if the amount was small, and in fact, only about 60 victims out of 160 expressed their intention to punish the defendant as stated in the criminal facts."

Victim A also did not report because the damage amount was small and only realized there were more victims after being contacted by the police. A police officer who investigated the case said, "We contacted each victim asking them to file a damage report for punishment."

Professor Kwak Dae-kyung of Dongguk University's Department of Police Administration said, "The government needs to cooperate with industry associations to inform self-employed business owners about various crime methods and raise awareness through education," adding, "Even if the damage amount is small, a culture of thorough reporting should be established to prevent further damage."