If Only They Used Their Brains for Good... Audacious Electronic Litigation Fraudsters

[Financial News] Fraudsters who established shell companies with the same names as real small and medium-sized enterprises, fabricated fake transaction records by transferring and withdrawing hundreds of millions of won, and ultimately secured court payment orders worth tens of billions of won, have finally been brought to justice. Their scheme exploited the vulnerability of 'Electronic Litigation,' which does not require direct verification of actual transactions if documents are submitted. However, the full extent of their crime was uncovered after a report from a suspicious victim company.
On the 26th, Taekseong Kim, the presiding judge of the Criminal Division 2 at the Chuncheon District Court, announced that out of the six individuals indicted for fraud, attempted fraud, falsification and use of official electronic records, and violation of the Act on Real Name Financial Transactions and Confidentiality, two were sentenced to four years in prison and one to one year and six months.
The remaining three defendants received suspended sentences of one year and six months in prison with three years of probation, along with 240 hours of community service.
According to the indictment, Mr. A and others first established shell corporations using the same names as their target victim companies.
They opened bank accounts under the names of these shell companies—'Company with the Same Name'—and repeatedly transferred and withdrew amounts of 5 to 6 million won. They then edited only the 'remittance statements' to fabricate documents as if they had made large payments for goods to the victim companies.
Based on these falsified documents, they filed for payment orders in court, claiming, "We paid in advance for goods but did not receive them, so we request a refund of the payment."
They took advantage of Electronic Litigation in this process. Unlike ordinary civil lawsuits, payment order cases are decided by document review alone, and Electronic Litigation reduces the burden of submitting documents, lowers costs, and speeds up procedures.
Using this method, from May to November 2023, they established a total of 10 shell companies and, by changing only the names, filed for payment orders against 28 victim companies at courts nationwide, securing orders worth a total of 9.9 billion won. They then visited banks and, using the original payment orders, withdrew 1.66 billion won from the victim companies’ corporate accounts.
Their crimes were exposed after the Chuncheon District Court launched an investigation, suspecting litigation fraud following a complaint from one of the victim companies.
Judge Kim explained the sentencing, stating, "The defendants’ crimes not only infringed on individual legal interests but also severely undermined judicial order and public trust in the justice system, causing significant social harm. Strict punishment is therefore warranted."

jjw@fnnews.com Jung Ji-woo Reporter