[Insurance Fraud Punishment Reduction Case] Successful Reduction of Insurance Fraud Punishment, Suspended Sentence Pronounced

The client who came to Daeryun seeking a reduction of insurance fraud punishment was a physician, and a friend who was not a medical professional had set up and operated a hospital with the client serving as a nominal head.

At the friend's suggestion, the client admitted people who had no need for inpatient treatment and made it appear as though they had received normal inpatient treatment, even though they had not actually been hospitalized.

By this method, the client conspired with each patient to receive and defraud insurance proceeds, such as hospitalization expenses, from the insurance the patients had subscribed to.

The client, together with the friend, was suspected of insurance fraud for receiving billions of won in insurance proceeds from insurance companies over thousands of instances.

The client came to Daeryun to seek a reduction of insurance fraud punishment through litigation concerning the violation of the Special Act on Prevention of Insurance Fraud.

■ Statutes Related to Insurance Fraud Punishment

◎ Special Act on Prevention of Insurance Fraud

▶ Article 1 (Purpose)
The purpose of this Act is to protect the rights and interests of policyholders, the insured, and other interested parties, and to contribute to the sound development of the insurance business and the promotion of public welfare, by providing for matters concerning the investigation, prevention, and punishment of insurance fraud.

▶Article 2 (Definitions)
The terms used in this Act are defined as follows.

1. The term “insurance fraud” means the act of deceiving an insurer with respect to the occurrence, cause, or content of an insured event and thereby claiming insurance proceeds.

2. The term “insurance company” means a person who operates the insurance business after obtaining authorization under Article 4 of the Insurance Business Act.

▶Article 4 (Reporting of Insurance Fraud, etc.)

Where there are reasonable grounds to suspect that the conduct of a policyholder, the insured, a person entitled to receive insurance proceeds, or any other person with an interest in the insurance contract or in the payment of insurance proceeds (hereinafter referred to as a “policyholder, etc.”) constitutes insurance fraud, an insurance company may report this to the Financial Services Commission.

▶Article 5-2 (Prohibition of Arranging or Soliciting Insurance Fraud, etc.)
No person shall arrange, induce, solicit, or advertise insurance fraud.

▶Article 8 (Crime of Insurance Fraud)
(1) A person who falls under any of the following shall be punished by imprisonment for not more than 10 years or by a fine not exceeding 50 million won.

1. A person who acquires insurance proceeds, or causes a third party to acquire insurance proceeds, through insurance fraud

2. A person who, in violation of Article 5-2, arranges, induces, solicits, or advertises insurance fraud

(2) In the case of subparagraph 1 of paragraph (1), imprisonment and a fine may be imposed concurrently.

To reduce the insurance fraud punishment, Daeryun's insurance attorney argued that the client had not been involved in decisions on the admission and discharge of the false patients or in the issuance of documents submitted to the insurance companies.

The person who committed the insurance fraud by inducing falsely hospitalized patients to visit the hospital and personally preparing false medical opinions so that insurance proceeds could be fraudulently obtained was the client's friend, who co-operated the hospital.

The client only belatedly became aware that the friend was committing insurance fraud and tried to dissuade the friend from the offense.

However, the friend continued the offense despite the client's efforts to dissuade, and the client tried not to take part in the insurance fraud in order to uphold a medical professional's conscience.

To reduce the client's insurance fraud punishment, Daeryun submitted the statements of people close to the client as evidence and argued that the client had not been involved in the documents submitted to the insurance companies.

To reduce the insurance fraud punishment, Daeryun's insurance attorney argued that the client had not played a major role in the insurance fraud offense.

At the time, the client carried substantial debt due to reasons such as a failed clinic opening and was under severe financial strain.

In the meantime, at the friend's suggestion, the client worked as a salaried physician at a so-called “nonprofessional-operated hospital” and received a fixed monthly salary.

Daeryun's insurance attorney emphasized that the client had merely accepted the friend's offer and worked for a salary, and had not played a major role in the insurance fraud offense, and thereby sought a reduction of the insurance fraud punishment.

The client who came to Daeryun seeking a reduction of insurance fraud punishment had violated the Special Act on Prevention of Insurance Fraud and was in a situation requiring an insurance attorney's assistance.

To reduce the insurance fraud punishment, Daeryun's insurance attorney conducted detailed consultations with the client and assisted with the overall litigation procedure.

As a result, the court accepted Daeryun's arguments and pronounced a suspended sentence for the client.

The client conveyed thanks several times to the attorney in charge, who had done their best to reduce the insurance fraud punishment.

If you are someone who, like the case above, needs a reduction of insurance fraud punishment, you may visit Daeryun Law Firm for a consultation.