Payment Gateway Company Caught Supplying Virtual Accounts to Voice Phishing Organizations

A payment gateway company that supplied virtual accounts to voice phishing and illegal gambling organizations has been detected for the first time in South Korea.

On July 3, the Joint Government Investigation Team on Voice Phishing Crimes at the Seoul Eastern District Prosecutors' Office (headed by Hong Wanhee) announced that it had uncovered, for the first time, a payment gateway company that distributed virtual accounts to voice phishing and illegal gambling operations.

The investigation team indicted the de facto owner of the payment gateway company and the supplier who registered shell companies under false names on charges including violations of the Electronic Financial Transactions Act. In addition, an employee and the executive in charge of sales were indicted without detention.

They are suspected of providing a total of 4,565 virtual accounts to voice phishing and illegal gambling organizations between January 2023 and October of last year, by using shell companies as intermediaries for virtual account sales.

In this scheme, the payment gateway company would receive virtual accounts from banks, delegate management rights to sales agencies, and then provide these accounts to merchants. The payment gateway disguised voice phishing and illegal gambling organizations as merchants by using shell companies as intermediaries. These organizations then used the virtual accounts to collect funds from victims and transfer the money to laundering accounts, according to the investigation.

It was also revealed that the supplier registered under the names of shell companies had established four such companies specifically to use them as virtual account sales agencies.

Through the distributed virtual accounts, they managed approximately 1.8 trillion won in illegal funds and earned about 3.254 billion won in commissions.

The investigation team has taken measures to preserve the entire amount of criminal proceeds and announced plans to continue investigating voice phishing organizations and others that illegally used virtual accounts.

The investigation team stated, "We will work with the Financial Supervisory Service to develop institutional improvements to block the use of virtual accounts for voice phishing," adding, "Investigations into voice phishing organizations are ongoing. We will proactively respond to new criminal methods and thoroughly confiscate criminal proceeds to eliminate the root causes of these crimes."