A group of car repair shops and machinery parts merchants were uncovered by prosecutors for collecting insurance money by using reproductions on cars left for repair instead of the proper parts.
Seoul Central District Public Prosecutors` Office Criminal DivisionⅠ(Head Chief: Yeom Woong-cheol) announced on Wednesday, January 5, that some 51 people were discovered involved in this, including people from nine car repair shops, four stores selling parts, two hospitals and an insurance fraud group of 30 people, and that seven of them were arrested.
Collecting Insurance Funds on the Security of a Drivers Life-
A Mr. Yoon (age 59) who manages a garage in Munjung-dong, Songpa-gu, Seoul, was arrested for deliberately plotting with Mr. Kang, who sells machinery parts, and falsely claiming insurance to insurance companies for a year starting November 2003 and collecting some 25 million won.
According to the prosecution, Mr. Yoon went to buy the real parts needed for a car repair at Mr. Kangs shop, and then claimed the expenses for it to the insurance company. After that, he returned the parts back to Mr. Kang and bought recapped or forged parts to repair the car. It was found that Kang collected 20 percent of the insurance fund and the rest went to Yoon.
The regenerated parts came from cars in accidents or junk cars, and the forged parts were made from bad material and are sold at 20 to 50 percent of the original parts price, but the quality is not certified. The shops that were caught used second-hand parts for most of the car repairs, and it turned out that even the steering system, power transmission system and the impact absorption system, which may jeopardize a cars safety, were repaired with second-hand parts.
The prosecution said, We selected nine repair shops for the crackdown, and it turned out that all of them were collecting insurance in this way. It seems that the use of reproductive and forged parts has spread to most repair shops.
The Enlarged Scale of Insurance Fraud-
Mr. Yoon, a car repairer, got together with a Mr. Lee, a car owner, saying that he would give a free paint job, and made a scratch on the car.
After a paint job on the entire car, he collected 1.2 million won from the insurance company, and is currently charged with collecting insurance for a total 33 million won, for the 30-odd times he tried this scam.
In the case of a hit-and-run accident where the assailant is not known, the entire repair expense is paid by the insurance company, but the insurance premium of the car owner does not incur an extra charge. Fraud has taken advantage of this. A repair shop collects the repair expenses from the insurance company and the car owner has a free paint job done.
In order to put a stop to insurance fraud, the prosecution decided to book all car owners, which numbered around 30, who had their cars painted this way.
During this inspection, illicit commission payments between repair shops and tow truck companies who brought in damaged cars were exposed.
Head Chief Yeom Woong-cheol said, When a tow truck brings a damaged car to a repair shop, a commission of 200,000 to 250,000 won is given, and repair shops are resorting to insurance fraud in order to keep up with commission expenses.
Some Other News-
Some 30 people were caught collecting insurance using the classic method of deliberately causing a light accident and racking up medical treatment bills at a hospital for an extended period of time. It turned out that regular company employees were also involved in this case. The prosecution arrested five of these people, including a Mr. Kim, who collected 54 million won in insurance funds in this manner.
The prosecution said, The fact that reproductive and forged car parts are being widely used has been confirmed, but since there are no regulations and penalties for the use of second-hand parts, we could not carry out the booking. A confirmation on the stability of second-hand parts, which strongly affects driver safety, is necessary.