Criminal organization chart. Provided by Gyeonggi Northern Police Agency
The police investigation into the illegal real estate lending case worth 93.3 billion won, in which Saemaul Geumgo executives also participated, has been completed.
The 2nd anti-corruption and economic crime investigation unit of the Gyeonggi Northern Police Agency announced on the 24th that it had recently sent 33 people, including Mr. A, the operator of a real estate company, to the prosecution on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud, breach of trust, bribery, and increase in wealth).
The police have continued additional investigations after arresting and transferring the main culprits, loan broker B and former Saemaeul Geumgo branch executive C, in May. Including the 33 people sent this time, the number of people sent to the prosecution in connection with this case amounts to 109.
Mr. A, the real estate company operator who was transferred this time, is suspected of receiving an illegal loan of approximately 21.4 billion won in collusion with broker B. It was discovered that Mr. A recruited title borrowers along with an intermediate book and conspired with a licensed real estate agent to have them write a false sales contract.
This incident attracted a lot of attention as it caused a bank run (large-scale deposit withdrawal) at a branch of Saemaul Geumgo, where Mr. C belonged, and a merger with another Saemaul Geumgo.
Mr. B and Mr. C are suspected of inflating the collateral value of 106 buildings and land, including a used car sales complex, in over 10 locations including Changwon, Gyeongnam, Pyeongtaek, Gyeonggi, and Dangjin, South Chungcheong from July 2022 to March 2023 to raise illegal loans.
They recruited borrowers who would lend their names to falsely sell commercial buildings. He then offered to repay the sale price and loan interest, as well as provide millions of won in rental income, if he only lent his name.
Afterwards, Mr. B took out a loan from Saemaeul Treasury and inflated the valuation of the collateral through a pre-recruited appraiser. During this process, Mr. C played a role in lending an abnormally large amount of money even though he knew that the collateral valuation was excessively higher than the actual value.
The actual sale was not carried out properly, and the money remaining after paying the broadcasting fee was passed on to Mr. B’s group. It was found that through this method, Mr. B earned a total of 8.4 billion won, and Mr. C earned a total of 340 million won.
On the other hand, it is reported that the borrowers who transferred the title did not receive any significant economic benefits and were embroiled in civil lawsuits to repay debt and interest.
When the results of the police interim investigation were announced last May, the amount of non-performing loans identified was approximately KRW 71.8 billion. As a result of further investigation, it was ultimately determined to be 93.3 billion won. This amount was equivalent to 60% of the total receivables of the Saemaul Geumgo branch where the loan was originated.
A police official said, “Obtaining a loan through a broker or lending one’s name to another person’s financial transactions is an act that can be punished illegally,” and added, “You need to be careful not to be tempted by immediate profits and get involved in illegal activities.”
