'Borrow 300,000 won — just activate a SIM first': How a loan shark ring sold 4,000 burner SIMs to voice phishing gangs

Police have broken up an illegal lending ring that offered quick loans of 100,000 to 300,000 won ($214) to cash-strapped borrowers on the condition that they first activate prepaid SIM cards in their own names — cards the ring then sold to voice phishing organizations. The group distributed more than 4,000 burner SIM cards while collecting both loan interest and SIM sale proceeds, an investigation found.

Seoul's Gangbuk Police Station said Thursday it had arrested nine members of the illegal lending operation between April and July on charges of violating the Telecommunications Business Act and the Loan Business Act, detaining six of them. The suspects are accused of using high-interest micro-loans as bait to have debtors activate 4,185 prepaid SIM cards in their own names between October 2024 and April this year, then selling those cards to voice phishing networks and other criminal groups.

According to police, the ring operated under a ringleader in his 30s identified only as A, with members divided into roles covering borrower recruitment and counseling, SIM activation and sales, and financial management. The group sent spam text messages to recruit people in urgent need of cash, then told them they had to activate a prepaid SIM card in their own name to qualify for a loan. Each person was allowed to activate up to three SIM cards per day.

The loans carried predatory rates. Activating one SIM card earned the borrower a 100,000 won loan, with 150,000 won due back one month later — an annualized interest rate of roughly 608%. The ring then resold the collected SIM cards to voice phishing and other criminal organizations at about 400,000 won per card. The scheme let the group profit twice: once from the high-interest loans charged to desperate borrowers, and again from selling the SIM cards registered in those borrowers' names.

All members of the ring turned out to be acquaintances or relatives of one another. "All of the members are South Korean nationals and are friends or relatives," a Gangbuk Police Station official said, adding that recruiters and counselors were also drawn from within the group. To evade investigators, the members used burner phones, Telegram and personal remote-access computers. Proceeds from SIM card sales were received in the virtual asset Tether (USDT), then laundered into cash through currency exchangers and divided among the members, police said.

Police raided the ring's office in April, seizing computers, mobile phones and other evidence, then analyzed digital records and communications data to arrest the members one by one. Investigators subsequently preserved about 800 million won in assets belonging to the members — including bank deposits, jeonse deposits, luxury vehicles and virtual assets — through pre-indictment asset preservation orders.

Of the preserved assets, about 350 million won was held overseas in the form of Tether. Police tracked the overseas virtual assets and had them frozen. "Rather than a confirmed amount of criminal proceeds, this represents assets we identified and preserved first to ensure we can recover criminal gains," a Gangbuk Police Station official said.

Ringleader A and another member identified as B fled to China and remain at large. Police have obtained arrest warrants for both and issued Interpol red notices as the investigation continues.

Kim Jeong-ok, head of the Gangbuk Police Station's investigation division, said the case was significant because investigators had dismantled a hybrid illegal lending operation that combined micro-loans with burner SIM cards and had tracked down hidden virtual assets to preserve the criminal proceeds. "We will continue to do our utmost to eradicate illegal lending and burner-item crimes, and we will pursue criminal proceeds to the very end," Kim said.