21 referred to prosecutors over 43 staged crashes using rental cars, swindling 320 million won in insurance payouts

[Financial News] Twenty-one people have been referred to the Public Prosecution Office after using rental cars to stage dozens of crashes targeting vehicles that violated traffic laws and swindling insurers out of several hundred million won in insurance payouts. Investigators found that ringleaders in their early 20s recruited hometown seniors and juniors and others to join the scheme, causing 43 deliberate crashes over roughly two years and defrauding nine insurers of about 320 million won.
According to police on the 9th, Seoul Gwangjin Police Station arrested 21 suspects accused of violating the Special Act on Prevention of Insurance Fraud and referred all of them without detention. Police referred them to the Public Prosecution Office in two batches, on Aug. 28 and Oct. 29.
They are suspected of using rental cars to deliberately cause traffic accidents from January 2024 through November last year, then swindling about 320 million won in settlement payments from nine insurers. A total of 43 offenses have been confirmed.
The police investigation found that they targeted vehicles violating traffic laws, such as those changing lanes from a left-turn lane. When such a vehicle appeared, they deliberately caused a collision, claimed damages and filed an insurance claim.
Most of the crashes were minor enough not to require significant medical treatment, but the suspects were found to have complained of pain and been admitted to hospitals. They repeatedly carried out the scheme by obtaining settlement payments from insurers.
In particular, investigators found that all the vehicles used in the scheme were rental cars. The suspects repeatedly staged crashes using rental cars covered by insurance that did not require them to pay a deductible in the event of an accident. In effect, they took advantage of this method to collect insurance payouts while reducing their financial burden from the crashes.
The scheme was led by suspects in their early 20s. Investigators found that three or four ringleaders who had participated in the scheme most often recruited hometown seniors and juniors and others to take part.
Police launched an investigation after receiving information about the case from the affected insurers. Over several months, they gathered witness statements and analyzed footage from the time of the crashes to determine whether the collisions were deliberate and establish each suspect’s apparent involvement.
Police referred all 21 suspects without detention. However, some key suspects had already been detained in separate cases, while the remaining suspects were referred to prosecutors without detention, taking into account the extent of their involvement and other factors, according to reports.
Police plan to step up crackdowns on auto insurance fraud while also providing relief to drivers victimized by staged crashes. In cooperation with insurers, they plan to defer premium increases for drivers of the affected vehicles and share relevant information from the outset when reports of suspected deliberate traffic accidents are received, in order to prevent further harm.
[email protected] Lee Dong-hyeok Reporter