A Korean insurance agent who created a detailed manual coaching clients on how to fake heart arrhythmia symptoms — and how to manipulate medical tests to produce abnormal readings — has been sentenced to three years in prison. Here are the key points.

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Issue

When an insurance agent systematically recruits clients, provides them with step-by-step instructions to obtain false diagnoses, and takes a cut of the resulting fraudulent payouts, does that conduct warrant a custodial sentence under Korea’s Act on Prevention of Insurance Fraud?

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Facts

– From 2022 to 2025, A, a thirty-something insurance agent, recruited over thirty policyholders into a coordinated arrhythmia fraud scheme.
– A exploited a genuine medical characteristic of arrhythmia: because the condition involves irregular heartbeats that come and go, diagnosis relies heavily on the patient’s self-reported symptoms — making it unusually susceptible to fabrication.
– A produced and distributed a detailed fraud manual containing specific instructions, including telling doctors “my chest pounds and feels tight even when I’m sitting still.” The manual also advised clients to drink three espressos and an energy drink, then stay up all night before cardiac tests such as ECGs and ultrasounds — to maximize the chance of producing an abnormal reading.
– Additional tips included doing jump rope, squats, and stair climbing immediately before the test, smoking heavily without sleep, and visiting specific clinics known to issue diagnoses more readily.
– A also coached clients on post-payout behavior to avoid appearing on insurers’ fraud watchlists.
– Participants held multiple overlapping insurance policies, and the total fraudulent payouts across the scheme reached approximately ₩1 billion. A collected a commission from each client’s payout.

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Court Decision

– The Busan District Court (Criminal Division 6, Judge Kim Min-ji) sentenced A to three years in prison.
– One of the four co-indicted clients received ten months in prison. The remaining three received suspended sentences ranging from six months to one year and six months, with probation periods of two to three years.
– The court found that A had abandoned the minimum professional ethics expected of an insurance agent and bore primary responsibility for the scheme as its architect and organizer.
– The court emphasized that insurance fraud undermines the fundamental premise of the insurance system — rational risk distribution across a broad pool of participants — and imposes its costs on law-abiding policyholders in the form of higher premiums and reduced trust in the system.

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Key Takeaways

– An insurance agent who designs, distributes, and manages a fraud scheme bears aggravated criminal responsibility compared to individual participants — the role of organizer and instructor significantly increases culpability.
– Exploiting a medical condition whose diagnosis depends on subjective self-reporting is a deliberate and sophisticated form of fraud, not opportunistic deception.
– The scale of the scheme — over thirty participants, ₩1 billion in fraudulent claims, multiple overlapping policies — was central to the sentencing outcome.
– Participants who followed the agent’s instructions also faced criminal liability, though their sentences reflected their secondary role and individual circumstances.

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Why This Matters

This case is a striking example of how insurance fraud has evolved from individual opportunism into organized, manual-driven schemes with a professional intermediary at the center. For insurers, it highlights the particular vulnerability of conditions that rely on subjective symptom reporting, and the value of cross-checking claims patterns across multiple policies held by the same individual. For practitioners and regulators, it confirms that Korean courts will treat the organizer of a large-scale fraud ring — particularly one who profited directly from each fraudulent claim — as a principal offender deserving of a firm custodial sentence.

Article: https://mbiz.heraldcorp.com/article/10739188?ref=naver