Korea Coast Guard Arrests One Broker, Refers Ten Others Including Seafarers Without Detention
A group that exploited the seafarers' disaster insurance system to fraudulently obtain 2.3 billion won in insurance payouts has been caught by the Korea Coast Guard.
The Korea Coast Guard announced on December 1 that it had arrested and referred broker Mr. A for prosecution on charges of violating the Special Act on Prevention of Insurance Fraud, among other offenses. Additionally, ten others-including two hospital administration staff, three employees of the National Federation of Fisheries Cooperatives (Suhyup), three certified labor attorneys, and two seafarers-were referred without detention as accomplices.
Mr. A and his accomplices are accused of forging 39 disability grade certificates for 35 seafarers who suffered accidents between 2019 and last year, fraudulently claiming a total of 2.3 billion won in insurance payouts.
Investigations revealed that Mr. A obtained personal information of injured seafarers from Suhyup employees and hospital staff with whom he was acquainted. He then approached the seafarers, falsely claiming to be a labor attorney and promising to secure larger insurance payouts for them. The Korea Coast Guard explained that Mr. A even took precautions against being caught by collecting his success fees in cash.
The investigation found that, unlike the general industrial accident grading system of the Korea Workers' Compensation and Welfare Service-which requires strict review by a medical panel-government policy insurance for seafarers' disasters can bypass this panel. Mr. A exploited this loophole to commit the fraud.
As of this year, the seafarers' disaster insurance fund received 69.5 billion won from the national government and 16.9 billion won from local governments. Due to this crime, approximately 350 million won in national funds, 27 million won in local government funds, and 1.9 billion won from Suhyup were lost. The National Federation of Fisheries Cooperatives is currently pursuing a lawsuit to recover the undue insurance payments from Mr. A and the seafarers who received the payouts.
The government has entrusted the National Federation of Fisheries Cooperatives with the operation of the "Fishing Crew Disaster Compensation Insurance" to support the rehabilitation and social reintegration of fishermen who suffer injuries or illnesses during fishing activities. The Korea Coast Guard launched its investigation after receiving a tip-off from Suhyup's Special Investigation Unit (SIU) regarding suspected insurance fraud.
A Korea Coast Guard official stated, "If someone approaches you claiming they can help you receive higher insurance payouts, you should verify whether they are a licensed attorney or labor attorney. To prevent damage, you should obtain medical documents such as disability certificates directly from the hospital or through an explicit authorization process."
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