The scale of insurance fraud has been in the '1 trillion won range' for three consecutive years... Can I get help from a lawyer if I get involved?

The amount of insurance fraud discovered has exceeded 1 trillion won for three consecutive years, emerging as a social problem. Particularly, special caution is required as a careless attempt to receive more insurance money in the event of a car accident or hospital treatment can lead to irreversible consequences. According to the Financial Supervisory Service, the amount of insurance fraud detected last year amounted to KRW 1.1164 trillion, of which fraud related to automobile insurance and accident and disease insurance accounted for more than 70% of the total.

Kim Gwang-deok, a lawyer at Daeryun Law Firm, explained, "In the case of insurance fraud, a special law applies, so a more careful response is needed. There are many cases where unfair practices occur without one's knowledge, so it should not be considered a small number of crimes. Ordinary individuals can become involved at any time."

Q. What are the most common types of automobile and medical insurance fraud?
A. The most common form of automobile insurance fraud is intentionally causing an accident or exaggerating the damage from the actual accident and charging excessive repair costs or settlement money. Typical examples include unnecessary long-term hospitalization for minor accidents or demanding settlement money by adding additional passengers. In the case of medical insurance fraud, there are many methods of making up documents to make it seem like you received treatment that you did not actually receive, or falsely being hospitalized even when there is no need for hospitalization. Recently, there has been an increase in organized fraud where certain hospitals and patients collude to intensively provide expensive, non-covered treatments and collect actual loss insurance money.

Q. What is the difference between the ‘Special Insurance Fraud Prevention Act’ and general fraud crimes?
A. The general crime of fraud is established when 'deluding property or obtaining property benefits by deceiving a person,' but the Special Act on Prevention of Insurance Fraud has a narrower and clearer scope by specifying as a punishment subject to 'the act of claiming insurance money by deceiving the insurer regarding the occurrence, cause, or details of an insurance accident.' The biggest difference is the level of punishment. According to Article 8 of the Special Act on Prevention of Insurance Fraud, imprisonment for up to 10 years or a fine not exceeding 50 million won is prescribed. Repeat offenders are subject to aggravated charges, and if the amount of gain is more than 500 million won, they can be sentenced to imprisonment for life or up to 5 years or more in accordance with the Act on the Aggravated Punishment of Specific Economic Crimes, etc., so they are punished more severely than general fraud charges.

Q. What punishment will I receive if I am accused of being an accomplice by following the recommendations of a hospital or vehicle maintenance company?
A. Even if the person did not intend to do so, he or she may be punished as an accomplice if he or she tolerated the offer from the hospital or maintenance company or was fully aware that it was fraudulent and took advantage of it. It is not uncommon for people to complacently follow the lead thinking 'everyone else does this too' and end up receiving the same punishment as the main culprit. Insurance fraud is interpreted as an aggravating element of the crime of fraud. The court determines the sentence by comprehensively considering whether or not the person initiated the crime, the degree of participation, and the size of the profit obtained, but even simple participation can result in a fine or even imprisonment. If you have been wrongfully implicated, it is very important to prove that there was no intent and to legally explain the specific circumstances that led to your participation in the crime.

Q. When I receive a call from the insurance company's Special Investigation Unit (SIU) to come for an investigation, how should I make a statement to avoid any disadvantage?
A. The investigation by the insurance company's Special Investigation Unit (SIU) can actually be seen as the previous stage of the police investigation. All statements at this stage are recorded and can be used as extremely detrimental evidence in future criminal proceedings. Therefore, it is absolutely prohibited to hastily deny the charges or to speculate and state facts that you do not remember. You must answer clearly that you do not know anything about anything you are not sure about, and carefully consider what legal consequences your statement may have. From this stage, it is safe to prepare for expected questions and determine the direction of your statement with the help of a lawyer. It is also a suspect's natural right to be investigated in the presence of a lawyer.

Q. What is the solution by acknowledging some of the charges and reaching an agreement with the insurance company?
A. When it is difficult to deny a charge because there is clear evidence, it is important to acknowledge the crime and show sincere remorse. In particular, returning the entire amount of unfairly obtained insurance money to the insurance company and reaching an amicable settlement serves as the most important reason for reducing the sentence at trial. The key to reaching an agreement with an insurance company is not just returning money, but the process of getting the insurance company to submit an agreement requesting leniency from the suspect to an investigative agency or court. In the case of insurance fraud, the amount of damage is usually large, so settlement is often considered to avoid imprisonment. However, if there are multiple insurance companies, you must be careful because civil claims for refund of unjust enrichment may result.
 

Reporter Lee Dong-oh (canon35@mt.co.kr)

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The scale of insurance fraud has been in the '1 trillion won range' for three consecutive years... Can I get help from a lawyer if I get involved? (Shortcut)