Insurance Agents Scheme, Doctors Execute: Group Indicted for 2.2 Billion Won Insurance Fraud

Uncovering the Reality of "Manager-Run Clinics" Operated by Non-Medical Staff
Over 200 Patients Mobilized to Obtain 2.2 Billion Won in Insurance Payouts

A group of more than 200 individuals, including insurance agents, dental clinic staff, and patients, have been collectively indicted on charges of insurance fraud for orchestrating false dental records in order to claim approximately 2.2 billion won in dental insurance payouts.

Seoul Southern District Prosecutors' Office. Photo by Jiye Lee

On July 31, the Criminal Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Ki Nosung) announced that insurance agent A, dental hygienist B, and dental assistant C had been arrested and indicted for violating the Special Act on Prevention of Insurance Fraud and the Medical Service Act. Fourteen others, including a dentist and another dental hygienist, were indicted without detention on charges including violations of the Act on Prevention of Insurance Fraud.

According to prosecutors, from August 2020 to April 2024, A and others were indicted for introducing patients to dental clinics as insurance agents and handling insurance claims on their behalf. The dental clinics would then issue falsified treatment certificates by deleting the date of the patient’s first visit or inflating the number of teeth treated with resin, thereby fraudulently obtaining insurance payouts totaling approximately 2.2 billion won.

The investigation revealed that 46 insurance agents, 6 dental clinic staff, and more than 200 patients participated, each assuming a specific role in the organized scheme. The clinics lured patients by paying about 30% of the fraudulent insurance payouts to the agents as "kickbacks," while the agents designed the crimes by exploiting loopholes in dental insurance policy terms.

The prosecution was able to uncover the crimes of previously uncharged clinic affiliates through account analysis and reinvestigation of relevant personnel. In particular, it was found that the dentist transferred to the police as the clinic director was actually a salaried employee, and a non-medical manager was the de facto operator and founder of the clinic—a so-called "manager-run clinic," which refers to clinics operated by non-medical staff employing doctors. As a result, additional charges of violating the Medical Service Act were brought.

Prosecutors also found that insurance agent A, who planned the crime, attempted to destroy evidence during the police investigation by hiding a mobile phone and instructing accomplices to change their statements and coordinate their testimonies. This was confirmed through additional audio recordings, mobile phone forensics, and analysis of transaction records.

The prosecution stated, "This case is a severe crime with significant social harm, as the manipulation of medical records undermines the reliability of essential data for public health policy, damaging both the insurance system and medical order. We will consider the degree of involvement by the remaining insurance agents and patients, based on the evidence secured, and will pursue appropriate legal action against them as well."

This content was produced with the assistance of AI translation services.