'5124%' Interest Rate, Loan Shark Who Drove Single Mom to Death Faces First Trial

Violation of the Loan Business Act and Debt Collection Act
Collected Usurious Interest Over 100 Times the Legal Rate from Six People

A loan shark who lent money at exorbitant interest rates to a single mother in her 30s raising a kindergarten-aged daughter and continuously threatened her, driving her to death, admitted most of the charges in the first trial.

According to the legal community on the 21st, the Seoul Northern District Court Criminal Division 12 (Presiding Judge Heo Myeongsan) held the first hearing on charges against loan shark Mr. A for violations of the Loan Business Act, Debt Collection Act, Electronic Financial Transactions Act, Telecommunications Business Act, and Act on the Regulation of Concealment of Criminal Proceeds.

Mr. A’s lawyer stated at the hearing, "Regarding the facts of the indictment, some offenses are denied, but the rest are fully admitted." He added, "Partial repayment was received from some victims, but interest exceeding the statutory interest rate was never collected." He also denied the charge related to threatening a debtor’s mother by sending a photo of a knife during the process of threatening several victims, claiming that the photo was not sent by Mr. A.

Mr. A is accused of illegally lending a total of 17.6 million won at exorbitant interest rates to six people from July to November last year without registering as a loan business operator, and sending threatening messages to their families and acquaintances as part of illegal debt collection activities. It is reported that the annual interest rate he charged exceeded 100 times the statutory interest rate (20% of the principal), ranging from 2409% to 5214%.

One of the debtors, a single mother in her 30s, Ms. B, was continuously harassed after borrowing money from Mr. A and ultimately made an extreme choice in September last year. Ms. B borrowed tens of thousands of won from Mr. A, but due to the exorbitant interest, the principal and interest reached 10 million won in less than a month, causing her difficulty in repayment. Subsequently, Mr. A sent hundreds of text messages to Ms. B’s family and acquaintances containing defamatory content such as "Ms. B is engaged in sex work," and even threatened to visit the kindergarten her daughter attended by phone. Mr. A is also charged with using accounts and mobile phones registered under other people’s names to operate the loan business.

The prosecution filed a petition for seizure and preservation of Mr. A’s assets last month to recover criminal proceeds. Seizure and preservation prevent the defendant from selling, transferring, or otherwise disposing of assets obtained through crime before the criminal trial is finalized.