A loan broker who fabricated documents to obtain 197 billion won in credit guarantee certificates from the Korea Credit Guarantee Fund, targeting medical professionals preparing to open hospitals and pharmacies, has been sent to trial. After merging hundreds of separate cases forwarded by police and conducting supplementary investigations, prosecutors indicted the ringleader under detention while showing leniency toward many medical professionals, whom they largely regarded as having been exploited by the broker.
The Seoul Central District Prosecutors' Office Criminal Division 5 (led by chief prosecutor Jeong Jae-shin) said Wednesday it had indicted loan broker A under detention on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, forgery of private documents, and violation of the Lending Business Act.
Among the medical professionals forwarded to prosecutors along with A, two doctors were indicted without detention, while the remaining 276 doctors and pharmacists were given non-indictment dispositions.
According to prosecutors, A is accused of conspiring with 278 doctors and pharmacists between April 2022 and last November to obtain preliminary start-up guarantee certificates worth 197 billion won from the Korea Credit Guarantee Fund on 265 occasions, using methods such as submitting forged balance certificates and false medical equipment sales contracts. The preliminary start-up guarantee is a system that issues guarantee certificates of up to 1 billion won to support the opening of hospitals and clinics by holders of professional qualifications such as doctors.
A did not stop there. Investigators found that A additionally took about 56 billion won from 80 medical professionals by deceiving them into believing that "under Korea Credit Guarantee Fund regulations, the loan funds must be sealed for a certain period." A also used the seal stamps and seal certificates obtained during the guarantee certificate issuance process to arbitrarily draw up monetary loan agreements and apply for loans from lending companies, and received 1.957 billion won in fees from 151 doctors and pharmacists while brokering loans without registration.
The full scope of the crime was revealed through the prosecutors' supplementary investigation. While police initially forwarded the case divided into 270 separate cases, prosecutors merged them, then directly investigated more than 80 doctors and pharmacists and analyzed account transaction records. In this process, they additionally uncovered A's unregistered loan brokerage business and receipt of brokerage fees, leading to A's direct detention.
Prosecutors showed leniency toward most of the medical professionals in consideration of the substance of the crime. After analyzing KakaoTalk conversations and recorded transcripts, they concluded that many medical professionals had effectively been exploited after entrusting the loan procedures to the broker, or had participated only passively in the crime.
Prosecutors determined that the case was a representative example of embezzlement of public funds that exploited loopholes in the Korea Credit Guarantee Fund's preliminary start-up guarantee system. They said the crime continued for two years and eight months by exploiting a structure in which screening is centered on documents submitted by the applicant, and banks also rely on the credit guarantee fund's guarantee in conducting loan reviews.
"We will continue to sternly punish those who embezzle public funds and undermine the public nature and soundness of public funds created for the balanced development of the national economy," a prosecution official said.
