NH Nonghyup Bank Manager Embezzles 12.1 Billion Won Using Fake Real Estate Loans

An internal audit at NH Nonghyup Bank in Seoul has revealed that a branch manager embezzled 12.1 billion won (approx. $876,000) through fraudulent loans. The manager, identified as Kim, used fake real estate as collateral, exploiting weaknesses in the bank’s internal control system for over four years.

The bank’s headquarters detected the fraudulent activity in late August when they noticed suspicious loan activity at the Seoul branch.

The investigation found that Manager Kim secured a total of 17.1 billion won in loans over 106 occasions from June 2020 to August 2024. Kim used the names of acquaintances and created false documents, including forged copies of real estate registers.

Probe Reveals Systemic Weaknesses in NH Nonghyup Bank Security

Kim reportedly admitted to using non-existent real estate as collateral and confessed that he had lost all the money by investing in virtual currency.

“I received a loan using non-existent real estate as collateral,” Kim conceded during the investigation. “I invested in virtual currency but lost everything, so I have no money left.”

Of the 17.1 billion won in total loans, the bank confirmed that 12.1 billion won were illegal. NH Nonghyup Bank is now expanding the investigation to determine if other employees were involved.

“We will improve all the problematic areas,” a bank official stated. “We will continue to strengthen our system to prevent this from happening again.”

Ten years ago, the bank introduced a “roving auditor” system to prevent internal fraud. The bank designed the system to create a “dual internal control” structure by incorporating third-party auditors alongside regular audits.

However, the audit revealed that the roving auditors failed to detect Kim’s fraudulent activities, despite their responsibility to monitor such transactions daily. Nonghyup Bank’s roving auditors are all former employees of the bank, a fact that has drawn criticism from industry experts. Many believe this contributed to their inability to detect internal fraud.

Crypto Craze in South Korea Fuels Massive Market Growth

Cryptocurrency fever has taken hold of South Korea, with around 10 percent of the population investing in digital assets during Bitcoin’s record-breaking surge in early 2021. This marks a significant increase from 2017, when the crypto boom first hit the country.

South Korea now ranks as the third-largest cryptocurrency market globally, with much of its growth driven by cryptocurrency trading. This surge largely results from the ban on domestic Initial Coin Offerings (ICOs) and the small size of the country’s crypto asset management market.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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