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Loan Sharks Indicted for Using Military Secrets as Collateral
Overview of Current Situation
Prosecutors have announced that loan sharks who allegedly obtained top-secret military passwords from South Korean soldiers engaging in cryptocurrency transactions will face trial. This news was confirmed on October 2, following the discharge of an unnamed army captain, who was previously sentenced to a suspended prison term.
Collateral in the Form of Military Secrets
The Ministry of National Defence reported that the former captain and several other unidentified soldiers managed to convince these loan sharks to provide them financial assistance by using “level 3” security passwords as collateral. These passwords grant access to military bases and are critical for distinguishing friendly forces from adversaries on the battlefield.
Charges and Indictments
The Jeonju District Prosecutors’ Office revealed on October 2 that three individuals have been indicted and arrested in connection to this scandal. Among them is a 37-year-old man who is believed to be the ringleader, along with two associates. All three suspects are facing multiple charges, including violations of the Military Secrets Protection Act, the Loan Business Act, and the Debt Collection Act.
Exploitative Loan Practices
According to the prosecution, these loan sharks provided military personnel with exorbitantly high-interest loans, with rates reportedly reaching as much as 34,160% annually. In exchange for these loans, the soldiers provided not only military passwords but also identification tags, training plans, and unit organization maps, all classified as level 3 sensitive information. These passwords are changed daily and must be kept confidential; even expired ones are considered hazardous if exposed.
Methods of Solicitation
Prosecutors also stated that the 37-year-old ringleader operated an unregistered, illegal loan company. He allegedly sent out unsolicited spam text messages regarding loans to various phone numbers, attempting to solicit business from unknown individuals.
Involvement of Active-Duty Military Officers
Among the military personnel involved, it was found that ten active-duty officers reached out to these loan sharks to seek loans. However, when the sharks mentioned the use of military secrets as collateral, seven soldiers declined the offer. The remaining three, unfortunately, chose to share their passwords to secure loans.
Financial Distress and Consequences
Investigators believe that the soldiers had fallen into financial troubles due to online gambling and unsuccessful cryptocurrency investments. As a means to exert pressure, the loan sharks threatened to disclose to their military units any potential leaks of military secrets should the soldiers fail to repay their loans. The borrowed amounts generally ranged between 1 to 2 million won, equivalent to approximately $759 to $1,510.
Current Status of Investigations
Despite the serious nature of the allegations, officials noted that there is currently no evidence suggesting that the loan sharks attempted to misuse the passwords or any other classified information to gain access to military installations.
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