Defector insurance fraud widespread

After a news report of a North Korean defector’s insurance scam was published by the JoongAng Ilbo and the JoongAng Daily 10 days ago, a Gyeonggi Police investigation found that 264 of the 674 defectors they examined are insurance fraud offenders.

“We have confirmed that the defectors received a total of 3.1 billion won [$2.72 million] from 31 insurance companies in the past five years,” a Gyeonggi Provincial Police Agency investigator said.

The investigator said of those implicated, 61 received as much as over 10 million won and five pocketed more than 100 million won.

The practice appears to be so widespread that those numbers should come as no surprise. One afternoon last weekend at a hospital in Gyeonggi, two patients in hospital gowns sat on a sofa in the corridor and chatted in North Korean accents.

When a nurse was asked whether her hospital treats many patients who defected from North Korea, she said many pretend that they are native Koreans born and raised in China.

“People who speak with a North Korean accent come in groups wearing hospital gowns and have fun here,” said a man who runs a karaoke bar near the hospital.

An insurance policy worker surnamed Park said this isn’t the only hospital that allegedly gives bogus medical certificates for treatment.

“Hospitals in metropolitan areas in Ansan, Hwaseong and Yongin in Gyeonggi admit lots of defectors,” said Park, who works for an insurance company based in Anyang, Gyeonggi. “An insurance company worker hatches a plan with a hospital administrative worker and the hospital worker issues a fake certificate for treatment of a defector. Once the defector gets the insurance payment, the defector pays the insurance worker and hospital worker in return for insurance money.”

Park said there’s even a hospital in Gyeonggi that dedicated an entire building to catering to defectors, and there are still many others on the waiting list for admission.

“Some defectors who are admitted joke that they’re feeding the hospital,” Park said. “There are even hospitals that hire defectors for administrative jobs so that they can systematically attract more defectors.”

A 37-year-old defector surnamed Lee acknowledged that he bought eight insurance policies in three years under his and his wife’s names at the advice of a friend surnamed Kim, whom he met in 2007 in Hanawon, the government-run resettlement education center for North Korean defectors. He said he paid the insurance company worker 300,000 won every time he was admitted to a hospital. The insurance company paid him after he submitted hospital medical certificates for stays between a week and two months. Some insurance company workers approach newly-arrived defectors the day they are discharged from Hanawon education and make them an offer: If they simply buy insurance policies, they can carve out a living in their new home. Some defectors who settled in South Korea earlier lure newly arrived defectors to buy insurance policies for their whole family.

Some report that defectors sometimes view insurance fraud as a lottery ticket with a winning number - if they don’t get caught by investigators.

One defector turned insurance company worker surnamed Kim had more than 100 defector clients and she earned a fortune, the JoongAng Ilbo learned. Because she brought in so many clients, the company paid Kim a bonus so large that she was able to buy a house and an apartment.

Meanwhile, Unification Minister Hyun In-taek said on Thursday that Hanawon will give defectors an extra education session on insurance fraud to prevent potential scams. Hyun also ordered officials to develop measures to stop insurance company workers who try to lure defectors fresh out of Hanawon.

By Special Reporting Team [mijukim@joongang.co.kr]