Men arrested for forging bank payment guarantee documents

The Songpa Police Station in southern Seoul said Thursday that they arrested a group of two men on charges of forging bank payment guarantee documents and selling them to cash-strapped small businesses. Guarantee of payment is a document in which banks guarantee the payment of liabilities owed by debtors to their creditors.

According to the police, the two approached the financially squeezed head of a food wholesale company on March 5 to sell six documents of payment guarantee worth 2.4 billion won (24 million U.S. dollars) for 30 million won (30,000 dollars). On the following day, he gave the documents to a dairy products distributor in lieu of cash. Suspecting the validity of the documents, the distributor inquired the issuing bank and found that the documents had been forged.

After receiving a forgery report from the bank in April, the police traced the bank account used in the fraud, nabbing the forgers in their hideouts in Seoul and Incheon. Police officers discovered an additional 51 payment guarantee documents stealing the names of 11 commercial banks. The papers were worth 50 billion won (50 million dollars).

The police quoted one of the forgers as saying that anyone could download the document forms freely available on the Internet and easily forge bank stamps and the amount of payments guaranteed. The police are investigating whether additional payment guarantee documents had been circulated in the market.