Seoul Central District Court Hands Down Prison Sentence in 25.9 Billion Won Loan Fraud Case
Seoul – A court sentenced key figures to prison terms ranging from two to six years and six months for their roles in a 25.9 billion won (approximately $20 million USD) loan fraud scheme involving falsified self-funding data and improperly secured credit guarantees. The ruling, delivered by the Seoul Central District Court, underscores the severity of offenses that threaten the stability of the credit guarantee system.
The case centers on allegations that individuals deliberately misrepresented financial data to obtain loans, leading to potential insolvency for credit guarantee providers. While full damages were mitigated and some risk unrealized, the court emphasized the gravity of the deception and the potential for widespread disruption. The prosecution initially investigated 26 individuals, including a branch manager, but ultimately suspended charges against those who terminated credit guarantee agreements after loan repayment.
The Tribunal found that individuals identified as Joo and Park played a leading role in the criminal activity, stating, “It is inevitable that the imprisonment sentence is inevitable.” The court also noted that other executives and directors participated in the scheme, recognizing “the fact that it could be a great criticism.”
According to the court, the defendants submitted data “disguised as if it is a self-funding” without disclosing the true source of funds. The court stated,”The crime that provides property profits in the way of receiving a credit guarantee is to lead to the insolvency of credit guarantees and to disrupt the purpose.”
Despite acknowledging a lack of robust verification processes for guarantee applicants and the absence of realized damages in a recent report, the court determined imprisonment was warranted, notably for those who actively led the fraud. Sentences ranged from two years of probation to six years and six months in prison, factoring in efforts to mitigate damages.
