41 men arrested for alleged fraud in luxury car rental in Busan worth W1.6b

Police said on Wednesday they had arrested 41 men suspected of running an illegal car rental service in the southern coastal city of Busan after a months-long investigation.

Investigators said a suspect, nicknamed Choi, was arrested while the other 40, including an alleged 31-year-old dealer nicknamed Baik, were sentenced without physical detention on suspicion of violating South Korean law on passenger transport services.

The men are said to have collected 1.6 billion won ($ 1.4 million) from customers seeking to rent expensive brand name cars with personal license plates to make it look like they owned the cars.

Customers are said to have paid 500,000 to 1.5 million won a day to rent cars from luxury brands such as Ferrari, Maserati, Porsche Cayenne and Audi.

Choi, 34, and 20 others are accused of operating as loan sharks and providing the vehicles to Baik, who is accused of running an illegal car rental business.

People in need of quick cash would borrow money from Choi and others using the luxury cars as collateral, police said. Other luxury cars with temporary license plates were reportedly provided by organized crime networks in Busan.

Twelve men, including a 27-year-old suspect nicknamed Doh, are also accused of loaning luxury vehicles to the rental company they had either registered or leased in their name. They would have received generous commissions in return.

According to police, Baik admitted during questioning that he knowingly allowed an unlicensed customer to rent a car after “becoming greedy for money,” police said. The suspects also confessed to threatening a customer who damaged a vehicle, essentially forcing a pledge to pay 200 million won, police said.

By Catherine Chung (cec82@heraldcorp.com)