If you are accused of being an accomplice in a work loan fraud... "Early response is important"

Recently, ‘work loan’ organizations have been on the rise. According to a survey by the Financial Supervisory Service, the number of reports of damage from illegal private financing is increasing every year: 8,043 cases in 2020, 9,918 cases in 2021, 10,913 cases in 2022, 13,751 cases in 2023, and 15,397 cases last year. They target ordinary people who need urgent money with phrases such as ‘100% approval for everyone’ and ‘guaranteed credit rating upgrade’. In particular, because work loans are similar to the general loan process, loan applicants may become involved in crimes without their knowledge and be subject to criminal punishment as accomplices.

In fact, courts are tending to severely punish loan applicants who lent their names to work loans, considering them as accomplices who played an essential role in the crime. Even if the loan applicant did not know the specific method of committing the crime, if he or she knew or could have sufficiently anticipated that illegal results may occur while participating in the abnormal lending process, he or she may be recognized as a co-principal criminal of conspiracy due to ‘intentional negligence.’

In relation to this, lawyer Choi Han-sik (pictured) of Daeryun Law Firm said, “Due to the structure, loan clients are easily punished for being accomplices in fraud or forging private documents, so early response is more important than anything else.” Attorney Choi served as head of the legal team at a large corporation and bank. Below is a Q&A with Attorney Choi.

-What is a work loan?
▲Work loans, a type of financial fraud, refer to the entire act of defrauding financial institutions and obtaining loans by falsifying documents such as employment certificates and withholding tax receipts of people who are not eligible for loans. Recently, the method has become more sophisticated, with brokers registering loan applicants as regular employees with shell companies and then creating salary transfer details and four major insurance payment records for several months to steal loan funds.

-What punishment will you receive if caught?
▲Work loan is a complex crime that combines several criminal crimes and can result in the following punishment depending on the act.

First, the crime of fraud is established. The act of defrauding a financial institution with false documents to obtain a loan is itself a crime of fraud, and is punishable by imprisonment for up to 10 years or a fine of up to 20 million won. If the amount of misappropriation is more than 500 million won, the Act on the Aggravated Punishment of Specific Economic Crimes (Special Police Act) will be applied and a much more severe punishment will be imposed, including imprisonment for a fixed term of more than 3 years.

In addition, since employment certificates and income proof documents are forged during the loan process, the crime of forgery of private documents (Article 231 of the Criminal Act) and the crime of using forged documents (Article 234 of the Criminal Act) are applied. This corresponds to imprisonment of up to 5 years or a fine of up to 10 million won.

In addition, if you transfer or rent access media such as a bankbook or card at the broker's request, you will be subject to a heavy punishment of up to 5 years in prison or a fine of up to 30 million won for violating Article 49 of the Electronic Financial Transaction Act.

The most important point is that even if the loan applicant pleads that they simply lent their name, there is a very high possibility that they will be punished as an accomplice to a criminal organization. The court considers the act of providing one's name and cooperating with the loan application while knowing the risks of work loans as an essential contribution to the crime, and holds the person equally responsible as a broker.

-The first thing to do if you find out that you are already involved in a work loan is
▲There are many cases where work loans are recognized as accomplices in fraud, forgery of private documents, etc. and sentenced to prison even if the broker's instructions were passively followed. Therefore, as soon as you are aware of your involvement, you must stop all procedures and promptly initiate legal action.

First, you must secure all relevant evidence, such as call recordings with the broker, messenger conversation history, advertising texts or postings, and deposit/withdrawal details. Based on the obtained data, it is important to consult with a legal expert to objectively analyze the extent of one's involvement and whether the person's intention was intentional, and to devise a strategy for how to make a statement during the investigation stage.

If you have already taken out a loan, you may want to consider surrendering through consultation with a lawyer. However, hasty surrender may result in admitting all charges, so you must obtain legal assistance to determine when and how to surrender. It is also necessary to immediately contact the financial institution that issued the loan, inform them of the fraudulent loan, and take measures to prevent the spread of damage, such as suspending payments.

-The typical red flags of work loans that the general public can distinguish are:
▲Recently, as non-face-to-face lending has become more popular, people are often approached through SNS or text messages with things like ‘government-supported low-interest refinancing loan’ and ‘100% approval regardless of credit rating.’ They pretend to be a normal procedure and induce the installation of apps from unknown sources, or ask for key personal information, such as a copy of ID card, bankbook, check card, and public certificate password, claiming that it is necessary to issue a loan. The information provided in this way is directly misused for crimes, such as forging documents or opening a bank account in the name of the loan applicant, so you should never respond.

Also, if an advance payment is requested for fees, work costs, deposits, computer costs, etc., it is 100% a scam. Official financial institutions never recommend loans through text messages or SNS, or ask for money as a fee before executing a loan.

Reporter Kwon Byeong-seok (bsk730@fnnews.com)

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If you are accused of being an accomplice in work loan fraud..."Early response is important" (link)