Police busted organized criminals in insurance fraud

The police in the northern Seoul district of Seongbuk arrested, on April 10, 40 people who conspired with Korean organized criminal gangs for insurance fraud .

Eight of them were members of organized criminal groups, and others were wannabes, their acquaintances, and friends from school.

Their scheme was to bump into other cars and get themselves hospitalized to claim a total of 400 million won ($360,000) from four different insurance companies on 45 occasions, the police found through their investigation.

They occurred from March 2006 until August 2012 around Seoul and Gyeonggi Province, according to the police.

They allegedly fabricated facts in their accidents, disguising healthy people into those with injuries.

They allegedly threatened the insurance company workers into giving them certain amount of money.

To harden their stance, they showed their tattoos, and said, “I will report this case to Financial Supervisory Service (FSS) that you delayed the insurance compensation process.”

They did file a complaint, which in turn made the FSS call the insurance company to speed up the process, the police said.

The police said they had a lead that some yakuza were involved in recent insurance fraud cases, and asked the FSS for detail.

The workers who handled this case in the insurance company allegedly had consented to granting the money knowing the demand was too much, the police said.

They went ahead because they allegedly feared that they might be listed as one of the worst performing insurance companies by the FSS.

However, among other things, the number of the complaint calls is the main factor that decides the ranking of the companies, one FSS official who declined to be named said in a phone interview with the Korea Times.

If it ranks at the bottom of the list, the company’s marketing would be compromised by the power of the official acknowledgement by the institution as big as FSS, he added.

Cases like this burdens the other insured people, the police said. “This increases the money each insured person has to pay.Insurance money should be given to those who really need it.”