Unregistered lender preyed on 161 borrowers

Boss avoided charges through false statements

Recanted testimony leads to indictment of boss, lawyer

Flyers advertising loans from illegal lending operations are posted on a street in Seoul. (Yonhap)
Flyers advertising loans from illegal lending operations are posted on a street in Seoul. (Yonhap)

The ringleader of an illegal loan shark operation and his lawyer have been indicted on charges of ordering members of the operation to lie to investigators and in court. The false statements were intended to conceal the boss's involvement.

The ringleader, who had once evaded a police investigation because of the members' false statements, was ultimately detained after some of them recanted during trial.

According to the Seoul Northern District Prosecutors' Office on Thursday, prosecutors indicted and detained the boss of an unregistered lending business, identified as A, on charges of violating the Act on Registration of Credit Business. His lawyer, identified as B, was indicted without detention on charges of instigating perjury.

Three members of the operation were also indicted on perjury charges, while another person who had lent the business his name was indicted through summary proceedings.

Prosecutors believe A ran the unregistered lending business with the other members from February 2020 to June of the following year.

The group is accused of lending about 400 million won ($299,000) to 161 borrowers over 1,130 transactions. Prosecutors say it collected a total of about 700 million won in repayments, exceeding the legal interest rate cap.

However, A was not referred to prosecutors during the police investigation after the other members denied conspiring with him. Only the members were sent to prosecutors and indicted in August last year.

Prosecutors believe A and lawyer B intervened in that process. The two are accused of instructing the members to testify that each of them had run the lending business independently. The false statements were meant to prevent further wrongdoing from coming to light.

B then represented all of the members as their defense lawyer, holding multiple meetings ahead of witness examinations and allegedly pressing them to maintain their original statements in court.

The case turned when some of the members recanted their earlier statements during trial. After the trial prosecutor confronted them with evidence supporting the conspiracy, some of the members admitted that A had in fact been the ringleader. Based on this, prosecutors searched A's residence and other locations and launched a follow-up investigation.

Last month, prosecutors indicted and detained A. They then filed additional charges against A and B for instigating perjury, and against the members for perjury.

Prosecutors plan to confiscate the roughly 100 million won that A is believed to have earned from the illegal lending business. The funds are to be seized through future trial proceedings and returned to the victims.

An official from the Northern District Prosecutors' Office said, "We will continue to ensure through diligent prosecution that the truth is not obscured by perjury, and to establish the understanding that lying in court will certainly carry consequences."


jookapooka@heraldcorp.com