Ministry of Employment Announces Audit Results on 'Sanjae Cartel'
486 Cases of Fraudulent Claims Detected...Totaling 11.3 Billion KRW
Worker A was recognized for industrial accident compensation due to noise-induced hearing loss and received 48 million KRW as compensation. However, a Ministry of Employment and Labor audit confirmed that Labor Law Firm B, which represented A in the industrial accident claim process, took 15 million KRW?equivalent to 30% of the compensation?as a service fee. This law firm charged a high fee while providing conveniences such as hospital referrals and advance payment of diagnostic costs to A.
In the case of injured worker C, the application for musculoskeletal industrial accident compensation was entrusted to a law office. However, during the industrial accident lawsuit process, the person in charge was not the lawyer but an unauthorized office manager who handled the work alone. C stated, "I never met the lawyer or labor attorney during the process," adding, "The office manager took care of all the work and also received the service fee after the industrial accident compensation was paid."
On the 20th, the Ministry of Employment and Labor announced that as a result of a special audit of the industrial accident insurance system, suspicious signs of an industrial accident cartel and various cases of fraudulent claims were uncovered. The Ministry conducted a special audit focusing on the Korea Workers' Compensation and Welfare Service, an affiliated agency, from November to December last year, and recently completed additional inspections over the past two weeks on some labor law firms suspected of involving industrial accident brokers (office managers).
The audit revealed that some labor law firms violated the Medical Service Act by advancing diagnostic costs and providing various conveniences to lure patients to specific hospitals. Through these business practices, they operated corporately, handling about 100 cases annually and receiving up to 30% of the industrial accident compensation that patients were entitled to.
Furthermore, labor attorneys or lawyers did not directly handle the cases; instead, office managers processed the entire industrial accident compensation procedure and collected the service fees into their own bank accounts. The Ministry of Employment and Labor has taken strong measures using all administrative means, including requesting investigations and recovering funds, regarding these illegal activities and fraudulent cases.
Minister of Employment and Labor Lee Jeong-sik stated in a briefing, "Based on the illegal circumstances identified so far, we have investigated the entire process of proxy work performed by certified labor attorneys and requested investigations into 11 labor law firms and legal offices," emphasizing, "Depending on the investigation results, we plan to strictly take actions such as disciplining certified labor attorneys and revoking the establishment permits of labor law firms."
Additionally, 883 suspected cases of fraudulent industrial accident insurance claims were investigated, and 486 cases (55%) were found problematic. The amount of fraudulent claims detected reached 11.325 billion KRW. Measures such as double recovery of unjust profits, re-determination of disability grades, and criminal prosecution are being taken against the detected fraudulent cases.
The Ministry of Employment and Labor also plans to supplement the system to address loopholes in the management of the industrial accident insurance system. They will first revise the delegation basis related to the principle of presumption and strengthen control over so-called malingering patients through standard treatment periods. Organizational diagnostics will be conducted on the Korea Workers' Compensation and Welfare Service, which lacks innovation and operates hospitals inefficiently.
Minister Lee said, "We will strictly handle the issues uncovered in this audit in cooperation with investigative agencies to ensure that corrupt practices like the industrial accident cartel can never take root again," adding, "Through the 'Industrial Accident Compensation System Improvement Task Force (TF)' launched on the 30th of last month, we are deeply discussing improvement measures with various external experts."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
