Illegal Money Lender Arrested After 3,476% APR Scheme Leads to Victim's Death

A loan shark operating an illegal lending scheme disguised as "gift certificate pre-sales" has been arrested by police for extorting tens of millions of won and threatening debtors.

The Gyeonggi Nambu Provincial Police Agency announced today (June 17) that it has arrested a suspect in his 30s, identified as A, on charges of violating the Money Lending Business Act and filing false accusations.

Police have also booked four other accomplices, including a woman in her 40s identified as B, without detention for assisting in the crimes.

Suspect A is accused of running an illegal lending operation from late January to early May. The scheme involved lending small amounts of emergency cash to victims, then requiring them to repay the debt by purchasing and sending gift certificates of a significantly higher value.

During this period, A lent 220 million won to 113 people across 335 transactions. By applying annual interest rates ranging from 240% to 18,000%, A pocketed 70 million won in illegal profits.

Police explained that if a victim borrowed 300,000 won, they were required to repay 500,000 won in gift certificates just one week later, which translates to an annual interest rate of 3,476%.

The loan amounts ranged from as little as 200,000 won to 2 million won. A specifically targeted vulnerable individuals who were unable to secure loans through legitimate financial channels.

While the "gift certificate pre-sale" method appeared to be a mutually agreed-upon, legitimate transaction on the surface, it was effectively an illegal financial scheme that exploited the desperate circumstances of debtors.

Victims typically contacted A after seeing advertisements for the gift certificate scheme and were instructed to post "Selling Gift Certificates" on online trading platforms.

A would then comment "I will buy it" on the victims' posts and send money, simulating a legitimate gift certificate purchase to provide the loan.

If victims failed to send the required amount of gift certificates—inflated by A's exorbitant interest rates—by the agreed-upon date, A would begin illegal debt collection practices.

A used verbal abuse and threats via phone calls and text messages. If the debt remained unpaid, A would file false criminal complaints against the victims, claiming they had "received the money but failed to deliver the promised gift certificates." Police confirmed that 39 victims were falsely accused by A.

In the midst of this, a woman in her 30s who had used A's lending services was found dead in a motel in Dongdaemun-gu, Seoul, on April 1.

After this incident was reported by the media on May 18, police immediately launched an investigation, imposed a travel ban on A, and began tracking the suspect. As the investigation closed in, A voluntarily turned himself in to the police recently.

A police official stated, "The suspect committed vicious crimes targeting ordinary citizens pushed to the brink," adding, "The nature of the crime is particularly grave as the suspect even weaponized public authority for illegal debt collection."
※ Please note: This article was translated by AI and may contain errors.