An importer who inflated the import prices of adult welfare products to pocket the elderly's petty cash has been caught.
On the 4th, Seoul Customs of the Korea Customs Service announced that importers of adult welfare products, A (female in her 50s) and B (in his 60s), were caught for violating the Customs Act and were sent to the prosecution without detention.
According to Seoul Customs, A is suspected of exploiting the fact that the payment for imported welfare equipment supported for the elderly is determined based on the declared import price (under the Elderly Long-term Care Insurance System) by reporting the import price of adult walkers, which are eligible for long-term care insurance benefits, to customs at a price higher than the actual price and embezzling the difference based on the manipulated price.
The Elderly Long-term Care Insurance System allows recipients of care benefits to receive up to 85% of the purchase or rental cost of welfare equipment from insurance funds. At this time, the insurance benefit for imported products is calculated based on the declared import price.
A took advantage of this by promoting her products as high-end items such as "Premium Rollator" and "Luxury Silver Car," and from April 2020 to September 2024, she inflated the import prices of more than 28,000 adult walkers of about 10 types by 1.3 to 2 times the actual price when declaring imports.
In this process, A persuaded overseas suppliers to cooperate in creating false invoices and manipulating refund differences, and when recovering the inflated prices, she showed meticulousness by establishing separate paper companies to distribute the imports to avoid suspicion of illegal foreign exchange transactions.
Overview of Health Insurance Finance and Beneficiary Damage Occurrence. Provided by Seoul Customs, Korea Customs Service
B, who is related to A by kinship, worked as an employee at A’s company, learned the criminal method, and then established a separate import and sales company. He is suspected of inflating the import prices of about 4,000 adult walkers by 1.6 times the actual price from August 2021 to August 2024 using the same method as A.
Seoul Customs confirmed that A and B manipulated the declared import prices, causing a loss of approximately 3.6 billion KRW to the Elderly Long-term Care Insurance funds managed by the National Health Insurance Service. It was also found that the beneficiaries (elderly users) who actually use the adult walkers suffered damages amounting to 360 million KRW due to their out-of-pocket expenses being inflated about twice.
Meanwhile, Seoul Headquarters Customs notified the National Health Insurance Service of the price inflation related to the Elderly Long-term Care Insurance benefits by A and others.
Furthermore, to eradicate future price manipulation acts aimed at defrauding insurance benefits, they plan to strengthen cooperation with the National Health Insurance Service by sharing the list of overseas suppliers who cooperated in the price manipulation.
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