Prison Sentence of 2 Years and 4 Months for Loan Company Head
Illegal Debt Collection and Threats Such as "I Will Inform Your Unit"
A loan shark who lent money at an exorbitant interest rate of up to 30,000% to military officers and others after taking military codewords (暗口號, secret words set to identify friend or foe) classified as military secret level 3 as collateral was sentenced to prison in the first trial.
The Jeonju District Court Criminal Division 7 (Judge Han Ji-suk) sentenced A (37), the head of a loan company indicted for violating the Military Secrets Protection Act and the Act on the Fair Collection of Claims, to 2 years and 4 months in prison, according to Yonhap News on the 2nd. The court also sentenced loan company employee B, who assisted A in illegal debt collection activities, to 1 year and 2 months in prison, and another employee C to 1 year and 4 months in prison with a 3-year probation.
A and others operated an unregistered loan business illegally in Suseong-gu, Daegu, and from May 2023 to August last year, lent about 160 million KRW to 15 military officers and others, collecting approximately 98 million KRW in interest. The highest interest rate applied to debtors reached an annual 30,000%, which is 1,500 times the legal interest rate (20% per annum).
Among the victims was an active-duty army officer. A and his group demanded military secrets such as codewords, friend-or-foe identification bands (bands worn on military hats or uniforms to distinguish friend from foe), unit organizational deployment charts, and mountain maneuver training plans as collateral from three military officer debtors. Most of the debtors, who urgently needed funds due to cryptocurrency investments and other reasons, readily handed over the military secrets requested by A via mobile phone messages and other means.
In particular, the codewords are secret words and numbers used by the Republic of Korea Army, Navy, Air Force, and United States Forces Korea for friend-or-foe identification, and if leaked externally, they could pose a serious threat to national security. These are military secrets that require special security measures, such as immediate disposal and replacement if leaked. Ten military officers were asked to provide codewords to A and others, but seven of them reportedly refused the proposal. A and his group also repeatedly threatened to disclose the leakage of military secrets by sending messages such as "I will call your unit tomorrow" or "Send the money before I make a direct call to the military unit" if the military officers who borrowed money failed to repay interest on time.
This case came to light when the military counterintelligence agency, the Defense Counterintelligence Command, detected an army captain-level officer who leaked codewords in January last year. The officer was charged with lending about 1 million KRW after sending photos of the codeword board in the unit's situation room to A and others, and was sentenced to 2 years and 6 months in prison with a 4-year probation by a military court in June last year. Subsequently, the Defense Counterintelligence Command confirmed evidence that civilian loan sharks were heavily involved in this case and requested joint investigations with the Jeonbuk Provincial Police Agency and Jeonju District Prosecutors' Office.
The court pointed out, "The defendants committed crimes that could threaten national security by receiving secret codewords for the purpose of running a highly private illegal loan business, which is highly condemnable," and added, "They also engaged in illegal debt collection by calling the families and coworkers of the debtors." Regarding the sentencing, the court explained, "However, there is no concrete evidence that the defendants leaked the acquired codewords beyond the collateral purpose, and considering that the debtor victims do not wish for punishment, the sentence was determined accordingly."
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