Prosecutors Indict Gang for Embezzling 3.2 Billion Won by Abusing 'Youth Jeonwolse Loan'

A group that embezzled 3.2 billion KRW by abusing the youth-tailored jeon-wolse loan system has been brought to trial.

According to the prosecution on the 14th, the Seoul Western District Prosecutors' Office has arrested and indicted five main perpetrators, including loan broker ringleader Mr. A (28), on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. Forty-four individuals who acted as false tenant recruiters were indicted without detention, and four others are currently under prosecution suspension.

They are accused of embezzling 3.2 billion KRW over 33 occasions between February and August last year by exploiting the fact that the "Youth-tailored Jeon-Wolse Loan System" was conducted through non-face-to-face document screening.

The Youth-tailored Jeon-Wolse Loan System is a low-interest loan program for young people without housing, supported by the Financial Services Commission and guaranteed by the Korea Housing Finance Corporation.

They recruited false tenants via social networking services (SNS) or acquaintances by falsely claiming that high-value loans could be obtained regardless of income, then took out 100 million KRW per jeonse contract from commercial banks, paid some to the false tenants, and embezzled the remaining balance.

The prosecution began a direct investigation in June last year and indicted 14 people, including the ringleader and recruiters, in September last year. After investigating financial transaction records and questioning defendants, on the 13th, they additionally arrested and indicted one loan broker and one recruiter each.

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