[Economic Crime 24 Hours] Harvest Season Farmers Deceived by Delivery Fraud... Fraud Alert Issued in Rural Areas

Fraud Scheme Involving Over 400 Million Won Against 12 Companies
Disappeared After Repeatedly Delaying Payment

Park Yong-chul (alias), who runs a meat business in Gwangju, Gyeonggi Province, received a business proposal from a supplier in October 2019. After visiting the supplier's logistics warehouse himself and receiving an offer to pay at the end of each month upon delivery of beef, Park signed a contract.

For several months, payments were made accurately on the promised dates. However, that was the extent of it. Although the delivery volume gradually increased, the supplier kept delaying payment and then disappeared without a trace in June of the following year. The unpaid amount Park was owed exceeded 20 million KRW.

As the main harvest season approaches, a ‘Agricultural Product Fraud Alert’ has been issued in rural areas. A common method involves withholding payment and stealing agricultural products.

The Gwangju Police Station in Gyeonggi began receiving reports of cases like Park’s in late June 2020. The police arrested Yoon (64) and Lee (60) on fraud charges for committing such crimes against farmers.

They are accused of deceiving victims in Gwangju and Icheon in Gyeonggi Province, as well as in Jeonnam and Busan, by promising to pay for deliveries of meat, crabs, sesame seeds, and construction materials, but then stealing the goods without payment.

Police investigations revealed that Yoon established a corporation and leased a logistics warehouse in Gwangju, Gyeonggi, to deceive victims into believing he was a legitimate supplier.

There were 12 victim companies identified in the police investigation. The unpaid amounts ranged from 5 million KRW to 60 million KRW per company, with total damages amounting to 406 million KRW.

Yoon also disguised the operation as a legitimate business by lending official positions to acquaintances with difficult circumstances and paying them cash in return.

Because of this, the employees of the company only lent their names and had no knowledge of who Yoon actually was, and the victim companies never saw Yoon’s face, signing contracts over the phone or with other individuals.

After arresting Yoon on July 7, 2020, the police also arrested Lee, who was the warehouse management director of the corporation, and handed them over to the prosecution.

Two years later, a similar case occurred in Hampyeong, Jeonnam. Oh (51), who introduced himself as an employee of a food distribution company, was caught by police for stealing agricultural products worth 30.31 million KRW, including red beans, chili peppers, perilla seeds, and soybeans, from 11 local farmers without paying for the deliveries.

Oh deceived farmers by promising to buy at prices higher than the market rate, and when farmers demanded payment, he gave them a different contact number. He also impersonated a ‘Food Mart Accounting Manager’ to farmers who called, saying “payment will be made soon,” effectively playing ‘two roles’.

The police believe Oh committed similar fraud against farmers in other areas such as Yeongam and Muan, and promptly sent him to prosecution after arrest.