Inflated Tumor Counts Used to Fund Cosmetic and Plastic Surgery Procedures
The hospital director, brokers, and patients-totaling 120 individuals-have been apprehended by police on charges of fabricating false medical records, such as diagnosing fake tumors, to fraudulently obtain insurance payouts worth approximately 1 billion KRW (about 1 million USD). Investigations revealed that after creating these false medical records, they used the insurance money to receive cosmetic and plastic surgery procedures.
According to Yonhap News, the Medical Crime Investigation Unit of the Busan Metropolitan Police Agency announced on October 20 that it had arrested a surgeon in his 40s, referred to as Mr. A, and two brokers-a man and a woman in their 50s-on charges of violating the Special Act on Prevention of Insurance Fraud and the Medical Service Act. Police also booked Mr. A's father, Mr. B, an 80-year-old surgeon, another broker, and 115 patients involved in the scheme without detention.
From February 27, 2023, to April of this year, Mr. A and others are accused of conspiring with patients recruited by brokers to create false medical records, enabling them to claim 1 billion KRW (about 1 million USD) in indemnity insurance payouts from 14 insurance companies.
They inflated the number of tumors by diagnosing fake ones to claim higher insurance payouts. For example, if four tumors were actually found in a patient, the records would be altered to show six. To create evidence of surgery, existing tumors were split into multiple samples, or for patients undergoing breast augmentation or reduction without tumors, tissue from those surgeries was disguised as if it had been obtained during a Mammotome (breast tissue procedure).
Police explained that patients could receive 1 million KRW (about 1,000 USD) in indemnity insurance per tumor, and the inflated medical expenses were used to provide cosmetic and plastic surgeries to the patients. Mr. A used the fraudulently obtained insurance payouts for procedures such as forehead lifts and breast surgeries. He also created false records indicating that hospitalized cancer patients had received non-insurance-covered treatments-such as extracorporeal shock wave therapy, manual therapy, injections, or immunotherapy-allowing the insurance payouts to accumulate like savings, which were then used for skin booster injections or scalp treatments.
Mr. A was found to have separately maintained handwritten charts for patients who filed fraudulent insurance claims. Materials seized during a police raid of the hospital included evidence that fake tumors were added to the records in different colored pens. The police also discovered ledgers kept by administrative staff tracking the amount of fraudulent insurance funds accumulated for each individual. Additional evidence, such as nurse handover notes, included entries like "Only entered into the system to appear as if surgery was performed on October 28," further substantiating the fake surgeries.
The brokers reportedly received a referral fee of 7-11% per patient from the hospital or were paid a monthly salary by Mr. A to recruit patients.
During the investigation, police also confirmed that Mr. A had taken photos of anesthetized female patients during breast surgery with his mobile phone and shared them with brokers, leading to an additional charge of violating the Sexual Violence Prevention Act.
The police stated, "To recover criminal proceeds, we filed a pre-indictment preservation order and secured 730 million KRW (about 730,000 USD) from the hospital director and 28 million KRW (about 28,000 USD) from the brokers," adding, "We will expand our investigation to similar hospitals and respond strictly in cooperation with related organizations such as the Insurance Association and the Financial Supervisory Service."
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