Gang Arrested for Deceiving 460 Seniors and Embezzling 3.6 Billion Won

After Opening Mobile Phones Under Seniors' Names,
Crimes Committed: Secret Small Loans and High-Priced Purchases Without Owners' Knowledge

Eleven members of a gang who pocketed about 3.6 billion KRW by opening mobile phones under the names of elderly people and then secretly taking out small loans or purchasing high-priced items without the knowledge of the owners have been arrested.

The Chungnam Provincial Police Agency reported on the 17th via Yonhap News that among the 11 suspects charged with fraud and violations of the Telecommunications Business Act for secretly taking loans and purchasing goods after opening mobile phones, three have been detained and sent to prosecution: two in their 40s who were in charge of recruitment and cashing, and one in their 40s responsible for small mobile loans. The remaining eight were referred to the prosecution without detention.

They are accused of borrowing the names of elderly people to open mobile phones in the Chungcheong, Gangwon, and Seoul metropolitan areas from April to November last year, then secretly taking out small loans or purchasing expensive mobile phone devices on installment plans, pocketing about 3.6 billion KRW. It is reported that around 460 victims were deceived into handing over personal information by their lure of "receiving government communication subsidies."

The gang deceived elderly people vulnerable to information about communication devices by promising that if they opened a mobile phone (SIM card), they would receive 1 to 1.5 million KRW in communication fee support based on their personal credit information. They also paid initial victims 100,000 to 150,000 KRW to spread the word and lure other victims.

Investigations revealed that the gang operated systematically by having recruiters, mobile phone activation teams, and cashing teams in each region. Recruiters gathered victims, the mobile phone activation teams opened the phones, and then the cashing teams profited by using the phones for small payments, purchasing expensive mobile phone devices on installment plans, and subscribing to internet services. Victims are reportedly suffering from huge debts billed later.

The police raided the gang’s hideouts and seized about 100 million KRW worth of assets, including 70 million KRW in cash and about 20 unused mobile phones. They are conducting additional investigations to identify accomplices and are tracking the use of the criminal proceeds. Lee Seung-tae, head of the Anti-Corruption Investigation Unit at the Chungnam Provincial Police Agency, warned, "If you are induced to open a mobile phone on the condition of receiving communication subsidies or other funds, it is highly likely to be a fraud," urging "special caution."