“I am from the ○○○ family”… Fraudulent acts using politician's name

Daughter of Former Busan District Mayor Involved in 15 Billion Won Investment Fraud
Younger Brother of Election Candidate Sentenced to 1 Year 10 Months for Fraud
Former County Head's Sister Arrested for Embezzling Rotating Savings Fund

Recently, a series of fraud schemes involving families of politicians have been occurring. These schemes involve gaining trust by using the names of family members who were elected public officials, then soliciting investments or borrowing money. Since the amounts involved in these cases range from tens of millions to hundreds of billions of Korean won, special caution is required.

According to the legal community on the 28th, Ms. A, a woman in her 40s and daughter of a former district mayor in the Busan area, admitted to charges of investment fraud amounting to 15 billion won during the first trial on the 22nd at the Busan District Court Eastern Branch Criminal Division 1 (Chief Judge Lee Dong-gi). Ms. A is accused of embezzling 15.1 billion won from 20 people from 2016 until last year by claiming that her father was engaged in the recycling of military supplies and cleaning business and that the profits could be paid out stably.

Ms. A reassured victims by emphasizing that her father was a former district mayor, but in reality, no such business was being conducted. The investment funds were used for personal expenses such as purchasing luxury goods and children's education abroad, and part of the money was used in a so-called 'Ponzi scheme' by paying returns to other victims to continue the fraud.

Mr. B, a man in his 50s and younger brother of an opposition party candidate who ran in the 22nd general election, was sentenced to 1 year and 10 months in prison on the 15th in the first trial on charges including fraud. In April 2022, Mr. B gained the favor of a victim he was dating by saying that his older brother was a famous politician and lawyer who could help if there were any legal issues.

In June of the same year, Mr. B asked the victim to lend him 20 million won, promising, "I will repay it as soon as my parents or older brother return from overseas." The victim transferred 12 million won in two installments but did not get it back. In October of the same year, Mr. B borrowed about 47 million won from other victims and invested it in overseas stocks and futures but did not return the money. He issued an IOU worth 58.5 million won to one of them and even provided his brother’s phone number.

Ms. C, a woman in her 60s and older sister of a former county governor in the Busan area, embezzled tens of billions of won while running a rotating savings group. According to the Busan Gijang Police Station, Ms. C was arrested on the 14th on charges of fraud. Since 2021, Ms. C has embezzled about 4 billion won from acquaintances through the savings group, and it is reported that there are more than 20 confirmed victims so far. Ms. C also committed the crime by leveraging her family’s political background, but the former county governor stated that he was completely unaware and unrelated to the matter.

According to crime statistics from the National Police Agency, about 300,000 fraud cases occur annually. Those who deceive others to receive property or obtain financial benefits can be sentenced to up to 10 years in prison or fined up to 20 million won. Under the Act on the Aggravated Punishment of Specific Economic Crimes (Special Act), fraud is applied when the criminal proceeds exceed 500 million won. If the amount is less than 5 billion won, the sentence is at least 3 years in prison; if it exceeds 5 billion won, the maximum penalty is life imprisonment or imprisonment for at least 5 years.

Professor Kim Do-woo of the Department of Police Science at Gyeongnam University said, “It is a common pattern in fraud schemes to flaunt connections with celebrities for personal gain and gain trust. A common trait among victims is that they fall into crime while trying to easily obtain power or financial benefits,” adding, “Families of politicians can be seen as a kind of premium. Victims cannot directly approach politicians themselves but may believe they can gain some opportunity through those people.”