A ring of illegal private financiers who pocketed interest of up to 18,000% a year by lending small amounts of emergency cash and then demanding gift cards of larger value at repayment under a so-called "gift card preorder" scheme has been sentenced to prison in the first trial. When they did not get paid on time, they threatened victims or even filed false police complaints accusing them of fraud.
On the 10th, Judge Cho Hyun-kwon of the Suwon District Court Criminal Division 5 sentenced a man in his 30s, identified as A, to three years in prison on charges of violating the lend business law and false accusation.
An accomplice, a woman in her 40s identified as B, who was indicted on charges of violating the lend business law and aiding a suspect's escape, was sentenced to one year in prison and was taken into custody in court.
The court also ordered the two to each forfeit about 43.58 million won, splitting the approximately 87.16 million won in criminal proceeds they colluded to obtain.
From January to May, A and others were put on trial on suspicion of reaping illegal interest revenue by lending small amounts of emergency cash to victims and, at the time of repayment, taking gift cards of greater value than the principal under a so-called "gift card preorder" scheme.
During that period, they lent a total of about 230 million won over 348 instances and applied interest ranging from 240% annually to as high as 18,000%, and was found to have taken about 87.16 million won in criminal proceeds.
A was found to have hurled abuse and made threats against victims if gift cards were not received on the promised date. It also emerged that A even filed false police complaints accusing 39 victims of fraud, saying, "They took the money and did not hand over the gift cards."
B helped manage funds and ledgers, and was found to have provided a mobile phone opened under B's name and a hideout when A fled.
Their crimes came to light after police launched an investigation when a woman in her 30s who had borrowed money from A was found dead at a motel in Dongdaemun District, Seoul, on April 1.
The court said, "By disguising gift card purchases to run illegal private financing, threatening victims, and falsely accusing them, the nature and methods of the crimes are extremely antisocial," adding, "There are many victims and the amounts are considerable, so they should be punished severely."
However, it noted as reasons for sentencing that "the defendants admitted to all the crimes and confessed to false accusation, and it considered B's degree of involvement and criminal record."