Police Refer Illegal Lenders Who Lent 130 Billion Won at 2000% Annual Interest and Extorted 18 Billion Won

Allegations of Violating the Daebu-eop Act

On the 27th, the Mapo Police Station in Seoul transferred 15 suspects, including A (33), an operator of an unregistered loan business, on charges of violating the Act on Registration of Credit Business and Protection of Finance Users. They are accused of charging interest rates exceeding 2000% per annum to over 2,300 small business owners facing financial difficulties, collecting interest totaling approximately 18 billion won.
/Photo by Seoul Mapo Police Station

[Asia Economy Reporter Oh Gyumin] The police have handed over to the prosecution loan sharks who lent thousands of billions of won to over 2,000 people under the pretense of offering low-interest loans and illegally obtained about 18 billion won.

On the 27th, the Mapo Police Station in Seoul sent 15 suspects, including A (33), an operator of an unregistered loan business, on charges of violating the Act on Registration of Loan Business and Protection of Financial Consumers.

They are accused of charging interest rates exceeding 2,000% per annum to more than 2,300 small business owners facing financial difficulties, collecting interest amounting to about 18 billion won.

From February 2019 to December last year, they lured existing high-interest borrowers by receiving financial information from victims recruited through loan advertisements, verifying the possibility of new loans, and promising to refinance at low interest rates.

According to the police, their criminal method is called ‘Tongdaehwan Loan’ (통대환대출). They provide funds to repay existing debts, and once the credit score improves, they have the borrower take out a loan from another financial institution for the principal plus interest, thereby recovering the money.

A managed all the criminal funds and operated the unregistered loan business exclusively, making subordinate employees use aliases and burner phones to evade investigation agencies. It was also revealed that all loan transactions were conducted only in cash and checks.

The police analyzed seized ledgers and applied for pre-indictment seizure and preservation on vehicles, real estate, and other assets owned by three top managers including A, prohibiting the disposal of assets worth about 3.6 billion won. The police stated this is the largest amount of asset seizure in a single illegal private loan case since the revision of the Act on the Prevention of Drug Transactions in September 2020.

This content was produced with the assistance of AI translation services.