A group that set up an unlicensed guarantee insurance company, issued about 200 billion won worth of worthless insurance certificates, and pocketed about 3 billion won in fees has been sent to trial.
The Criminal Division 9 of the Seoul Central District Prosecutors' Office (Director General Go Eun-byeol) on the 6th indicted three former and current heads, including A, the head of an unlicensed guarantee insurance company, in custody on charges including violating the Insurance Business Act and violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud and embezzlement), and indicted without detention the corporation, one former head, and two staff members in charge of administration and sales.
According to prosecutors, from February 2019 to June this year, they are suspected of issuing, without approval from the Financial Services Commission, a total of 87 insurance certificates worth about 200.2 billion won in the corporation's name after receiving fees from construction companies and others.
After reviewing several cases referred only for operating an unlicensed guarantee insurer, prosecutors suspected that this was not a simple unlicensed business case but an organized and repeated financial fraud that deceived counterparties into signing guarantee insurance contracts despite having no ability to pay insurance benefits, and launched a supplementary investigation.
As a result, they uncovered an additional 82 unlicensed insurance certificates worth about 198.6 billion won that had been issued, and even found that employees embezzled about 3 billion won in fees obtained through guarantee insurance fraud against local governments and others that trusted the certificates and signed contracts, and through illegal business operations.
The corporation in question had a record of being punished multiple times over more than 10 years for violating the Insurance Business Act, yet it registered as if it had false capital of about 10 billion won and continued operating by replacing its head four times over about two to three years from 2018 to the present.
Prosecutors said, "We shut down the corporation's website to prevent the structural crime from being repeated and filed a petition with the court for an order to dissolve the corporation," and added, "We will respond sternly to intelligent crimes that disrupt the financial order and infringe on the public's property and trust."