"20% Commission"... Illegal Loan Shark Gang Seized for Pocketing 10.8 Billion Won

One Ringleader Arrested, 107 Organization Members Referred Without Detention

A gang involved in illegal loan brokerage, which collected about 20% of the loan amount as fees and pocketed a total of 10.8 billion KRW, has been handed over to the prosecution.

On the 5th, the Seoul Seodaemun Police Station announced that among the four ringleaders operating an unregistered loan brokerage business, one was arrested and sent to prosecution, and 107 members of the organization were sent to prosecution without detention on charges of violating the Loan Business Act.

They are accused of setting up offices in Seoul and Gyeonggi Province from October 2022 to May this year, deceiving people into believing they were legitimate companies, brokering government-supported loan products, and collecting about 20% of the loan amount as fees. It is known that the total profit they embezzled during the crime period amounted to 10.8 billion KRW.

They operated in an organized manner with a first-stage call center, a second-stage execution organization, and a third-stage money laundering organization. The first-stage call center recruited victims who applied for loans through social network service (SNS) banner advertisements and conducted loan consultations with them. The second-stage execution organization received the victims’ information, checked loan eligibility, and executed the loans while demanding that 20% of the loan amount be deposited as fees. Then, the third-stage organization provided fake accounts and burner phones to the second-stage group, and after fees were deposited for a certain period, laundered the funds and delivered cash to the second-stage group, which then passed it back to the first-stage group, continuing the crime in this manner.

Most victims were vulnerable groups who found it difficult to obtain loans from primary and secondary financial institutions. The suspects took advantage of their lack of knowledge about financial products to collect brokerage fees under the names of fees, service charges, and commission fees.

A police official said, "If a company brokering loans to financial institutions requests fees under the names of service charges, guarantee fees, or commission fees, it is necessary to suspect an illegal company," and urged, "If you suffer damage from illegal activities, please immediately report to 112 and actively seek help from the police."