Per Kyunghyang and others, a fraudulent developer used ‘fake buyers’ to draw interim and group loans from several banks and pocket the funds. Losses total about ₩49 billion across four banks.

The method fabricated paper sales contracts to trigger lending, with cases confirmed where sales were nonexistent or false. Regulators and investigators are examining whether there was organized collusion.

Recurring loan fraud shows gaps in banks’ credit screening and collateral verification. Experts prescribe document authentication, on-site due diligence, and stronger information-sharing among banks.

For self-employed and business owners in Korea’s Chinese community, financial trust is a foundation of daily life. In loan and guarantee dealings, a habit of carefully checking counterparties and documents is needed.

This paper does not prejudge responsibility in any case; it reports the confirmed scale of losses and the issues around prevention.