Office worker sent to trial for ‘loan transfer’… Law: Not guilty because there was no intent to defraud

Reasons for credit rating increase and hiding loan history
Charged with refinancing a loan through a loan company and embezzling 100 million won
The court said, “The ability to repay was sufficient at the time of loan…
“There is no obligation to inform financial institutions of the source of funds.”

An office worker who was put on trial on charges of obtaining a loan by defrauding a financial institution through a broker was found not guilty. On February 20, the Ulsan District Court found Mr. A, an office worker in his 50s, not guilty on charges of fraud.

In 2018, in a situation where normal loans were impossible due to excessive debt, Mr. A was accused of conspiring with a loan company to defraud financial institutions and obtain a loan, stealing about 100 million won.

As a result of the investigation, it was confirmed that the loan company repaid Mr. A's debt on his behalf to raise his credit rating, and that Mr. A used this to borrow money from various financial institutions. The prosecution determined that Mr. A intentionally hid his loan history from the bank and did not explain the reason for his credit rating increase.

However, Mr. A completely denied the charges. They refuted that because the interest rate on existing loans was high, they switched loans, or so-called refinancing loans, to obtain low-interest loans. At the same time, Mr. A maintained a high credit rating at the time and claimed that he was fully capable of repaying the loan, including faithfully repaying the principal and interest. He also emphasized that he had already completed the debt repayment before the police investigation and that there was no intention to defraud him.

The court found Mr. A not guilty. The court ruled, “The defendant is not obligated by law to inform financial institutions of the source of repayment funds or whether there are duplicate loans, so he has never provided false information. Considering that the defendant repaid the principal and interest without delinquency, it cannot be said that he had no intention or ability to repay at the time of the loan.”

Attorney Song Min-ye of Daeryun Law Firm, who represented Mr. A in this case, explained, “In order to establish a charge of fraud, it is necessary to determine whether there was an intention to deceive based on the time of the act. Mr. A had sufficient repayment ability, including property income, and was able to avoid fraud charges as the fact that he had actually repaid all of the loan was reflected.”

Digital Content Team

[View full article]
Office worker sent to trial for ‘loan transfer’… Law: Not guilty due to “no intent to defraud” (Shortcut)