Jeonnam Police Arrest 18 Members of Fake Bank Account Distribution and Money Laundering Organization

Leased 117 Accounts to Criminal Organization, Laundering Crime Proceeds Worth 1 Trillion Won

The Anti-Corruption and Economic Crime Investigation Unit 1 of the Jeonnam Provincial Police Agency announced on the 3rd that they have arrested 18 members of a money laundering organization who distributed 117 fake bank accounts to criminal organizations involved in voice phishing, cyber gambling, etc., and laundered criminal proceeds worth 1 trillion won, on charges including organizing a criminal group and violating the Electronic Financial Transactions Act. Among them, 14, including the ringleader, were detained.

Additionally, 50 individuals who lent their names as ghost corporation representatives for a monthly fee of 500,000 won have also been booked on charges of violating the Electronic Financial Transactions Act and are under investigation.

They are suspected of establishing 62 ghost corporations from around February 2020 to June of this year, opening 117 corporate bank accounts, and distributing them to criminal organizations involved in voice phishing, cyber gambling, etc., in exchange for a monthly rental fee of 2 to 3 million won.

Police investigations revealed that they laundered funds worth approximately 1 trillion won by transferring proceeds through multiple accounts or withdrawing cash and delivering it, pocketing 2 billion won in account rental fees and money laundering commissions.

The police seized 201.5 million won in cash from the safe at the ringleader’s residence and plan to trace and preemptively confiscate and seize the remaining criminal proceeds before prosecution.

Each member had assigned roles such as ‘ringleader,’ ‘account recruiter,’ ‘account manager,’ and ‘withdrawal agent.’ They received support from the ringleader for necessary items for the crime, including ▲office space, ▲burner phones, ▲fake bank accounts, and ▲operating expenses, and operated systematically according to specific behavioral rules set by the ringleader to prepare for investigations.

To evade police investigations, they showed meticulousness by ▲remotely deleting evidence if the office was discovered, ▲using overseas-based messengers (such as Telegram) that are difficult to trace, ▲using aliases and burner phones, and ▲renting crime offices short-term and frequently relocating.

They also ▲recruited corporate representatives as acquaintances of the account recruiters by exploiting personal relationships, and ▲prevented external exposure of the crime by involving siblings and juniors as organization members responsible for deposit and withdrawal tasks.

When four lower-level members were arrested in March this year, to prevent the investigation from expanding, they disguised two middlemen as surrendering voluntarily and continued money laundering crimes by renting nearby officetels.

Through tracking investigations, the police identified the crime office, conducted on-site searches, arrested all 18 members including the ringleader, and secured evidence such as mobile phones, PCs, bank accounts, and OTP devices.

A police official stated, “Lending names for the establishment of ghost corporations and providing bank accounts to others can be subject to criminal punishment. In particular, fake corporate bank accounts are often provided to criminal organizations involved in voice phishing and other crimes and are misused for money laundering, making it difficult to trace and recover the victim’s funds, so special vigilance is necessary.”

He added, “Investigations will also be expanded to include criminal organizations using fake bank accounts and notaries involved in establishing ghost corporations. There is also a need to review the current system, which makes it easy for corporate accounts to be misused in crimes.”

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