Police have booked and are investigating a large group of doctors suspected of participating in loan fraud worth approximately 130 billion won ($96 million) to open private hospitals.
The Suseo Police Station in Seoul said Tuesday that it has booked 215 doctors on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.
The doctors are suspected of obtaining credit guarantee certificates worth a combined 130 billion won from the Korea Credit Guarantee Fund (KODIT) between 2022 and last year by falsely inflating their bank balances and misrepresenting them as their own funds to open private clinics.
KODIT operates a "pre-startup guarantee" program that issues guarantee certificates allowing prospective entrepreneurs with professional licenses, such as doctors and pharmacists, to borrow up to 1 billion won ($740,000).
At the time the doctors obtained the loans, applicants were required to hold at least 500 million won in personal funds to receive high-value guarantee certificates of 500 million won or more. After a series of loan fraud cases using similar methods, KODIT shifted last year to issuing guarantees based on estimated revenue rather than personal funds.
Police have also booked a broker on charges of lending money to the doctors to help them obtain fraudulent balance certificates and collecting fees equivalent to 2.2 percent of the loan amounts. Investigators have also identified signs that some doctors used the loan proceeds to purchase apartments and are analyzing bank account records, according to sources familiar with the matter.
