Tattooed gang member's fake government call: Thai-based fraud ring bilks small suppliers of W600m

Ten members of a fraud ring operating out of Thailand have been arrested for running a classic no-show scam targeting victims in South Korea. The group recruited burner bank accounts for use in their crimes and swindled about 22 small-scale domestic suppliers out of 600 million won ($443,000). The gang operated in teams of three and barred members from contacting other cells — a sign of careful planning to evade law enforcement.

The Seoul Metropolitan Police Agency Metropolitan Investigation Unit's financial crimes unit said Wednesday it had arrested 10 members of a fraud organization that set up a call center in Thailand and carried out a no-show scam worth around 600 million won, detaining eight of them. Police applied charges of joining and participating in a criminal organization, fraud, and violations of the Electronic Financial Transactions Act.

The no-show fraud ring was firmly established in Pattaya, Thailand, where it conducted its operations. From February through April, the group set up a call center across the first through third floors of a resort in Pattaya and carried out a range of criminal activities, from recruiting burner accounts to executing the fraud itself.

Gang members approached users of private gambling sites — operating under names such as "OO Lotto" and "Lotto O" — who had lost money, and obtained their bank account details. They contacted the users, introduced themselves as "sales team managers" at the gambling sites, and deceived them by claiming they would compensate gambling losses through a surety insurance company.

Once victims were taken in, the gang instructed them to open a new bank account and send the account number and password, ostensibly to calculate their compensation. The organization then seized the victims' account details and personal information and used them in its crimes to avoid detection by investigators.

The fraud method was a classic no-show scam: victims were directed to make proxy purchases of specific goods from a designated vendor, after which the gang pocketed the money deposited into that vendor's account and disappeared.

The gang used a pre-compiled list of victims to target small domestic equipment suppliers. They made random calls to suppliers on the list, impersonating a prison, a university, the Korea Institute of Nuclear Nonproliferation and Control, a city hall, and a district education office.

After establishing trust by placing large advance orders while posing as public institutions, the gang moved to the actual fraud. They told victims that a fire inspection was coming up and that they urgently needed fire-suppression blankets, fire extinguishers and other equipment, then persuaded them to make proxy purchases from a specific vendor.

The gang then provided victims with burner account numbers — pre-obtained through theft — as if they belonged to the designated vendor, defrauding about 22 people out of 600 million won in total.

Police investigations revealed the group to be a criminal organization operating out of Pattaya under strict internal discipline. The ringleader set up call center offices and living quarters for members across three floors of a resort in Pattaya. After securing the space, the leader recruited a management team chief and call center workers through job listing sites and personal referrals, eventually forming a criminal organization of 11 members in total.

Members were assigned roles in account recruitment and the no-show scam. They studied crime scripts before being deployed. The organization also incentivized criminal activity with performance bonuses — 3 million won per account recruited and 10 percent of the proceeds from each successful no-show fraud.

To maintain control, the organization kept members' passports and the phones used in the crimes under separate lock and key. Members were required to report their personal activities and earnings at regular intervals. The gang also divided into three-person teams, assigned each team to a different floor, and prohibited inter-team contact — all measures taken to prepare for a police crackdown.

Police obtained intelligence on the Thailand-based no-show ring in late March and, working with Thai police, swept up the entire organization. Members were arrested on April 27 — about a month after the intelligence was received — and subsequently extradited to South Korea. Police also secured 57 million won of the gang's criminal proceeds through a pre-indictment asset preservation order.

Police said they plan to continue tracking the ringleader, who fled during the raid, along with any remaining members. "No-show scams — in which fraudsters impersonate gambling or investment sites to claim they will compensate losses and demand bank account details, or pose as public institutions and universities to arrange proxy purchases — are on a sharp rise," a police official said. "We urge the public to exercise particular caution."