Gyeonggi police arrest 8 for phishing scandal worth ￦470M

The Cyber Investigation Division under Gyeonggi Nambu Police Agency arrested a ringleader and seven others who partook in SMS phishing schemes and extorted 470 million won ($408,000) from 12 people, the agency said Wednesday.

On April 16, a woman in her 40s received a text message from her daughter urgently asking for money to repair her broken phone screen.

Worried, the mother did as the person behind the text asked and gave out her personal information, including her ID and bank account password.

Only after the fact did the mother discover that the text sender was not her real daughter but a phisher, who had already withdrawn 30 million won from her account.

SMS phishing is a type of financial cybercrime in which criminals purport to be either a friend or a family member and lure victims into handing over their personal information.

In this way, the recently arrested individuals impersonated the victims' friends and family members to obtain their financial information.

They also tricked the victims into installing a mobile application which enabled the scammers to have remote control over the victims' cellular activities.

The victims were told they were downloading the app to pay for repairs requested by their close ones. The perpetrators then withdrew money from the victims' bank accounts and transferred it to their borrowed account.

The scammers face various charges including the violation of the Electronic Financial Transactions Act, for stealing 470 million won from 12 people for two months since mid-April.

They allegedly defrauded about 6 million won up to 100 million won per victim. In a few cases, the perpetrators even impersonated government institutions, the police said.

The perpetrators divided roles among themselves and operated in subgroups that were responsible for a specific part of the process such as money withdrawal, transmission and pickup, according to police.

The ringleader oversaw these subgroups, and directly transferred the stolen money to a second ringleader or to a currency exchange for money laundering.

The police confiscated 40.3 million won from the perpetrators and put the second ringleader on the wanted list. "We discovered evidence proving that a borrowed bank account was used to launder money in this phishing scheme," a police officer said. "Now, we are looking for additional crimes."

In the Gyeonggi Nambu Police Agency's jurisdiction alone, the rate of SMS phishing crimes increased 325.9 percent from 687 cases in 2019 to 2,926 cases in 2020. For the first half of this year, the case count is already up to 1,291.

The police pointed to the coronavirus as a cause for such exponential reports. "Covid-19 has facilitated financial processes by offering online banking services to remotely open an account or get a loan," said a police officer. "On the other hand, with financial crime methods evolving daily, crime rates are skyrocketing."

Warning the nation of possible phishing encounters, the police emphasized that that SMS phishing tactics are getting more and more clever.

"In the past, they stole gift cards," said the police officer. "But these days, scammers are tricking people into installing remote control apps on phones and seek to extort the victims' entire account balance."

"If somebody claiming to be family or an investigative agency inquires you for money via text, ask the person to call you first," advised Kim Seong-taek, the chief investigator of Cyber Investigation Division at Gyeonggi Nambu Police Agency.

"If damage actually occurs and money is withdrawn from your account, you must report to the police immediately and register to suspend the transaction."

BY PARK JIN-HO, LEE JIAN [lee.jian@joongang.co.kr]