South Korean police have dismantled a massive telecom fraud ring that exploited foreign residents’ passports to register thousands of SIM cards later used in scams and other crimes. Authorities estimate the scheme caused nearly 96 billion won ($69 million) in damages.
The Gyeonggi Bukbu Provincial Police announced Monday that 71 people have been implicated in the fraud network, with nine individuals arrested, including the owner of multiple phone shops in central Seoul. Investigators say the group illegally activated over 11,000 “ghost SIM cards” using passport copies of foreign nationals living in South Korea.
These fraudulent SIM cards were sold nationwide to criminal groups and used for voice phishing scams, drug trafficking, and illegal lending operations. Police suspect the ringleader, a phone shop owner, coordinated with brokers and complicit telecom staff to exploit identity verification loopholes in Mobile Virtual Network Operators (MVNOs), smaller carriers that lease infrastructure from major telecom firms.
Between February 2023 and May 2024, the group allegedly obtained scans of foreign passports via the encrypted messaging app Telegram. Most of the passport owners were Southeast Asian nationals who were unaware SIM cards had been registered under their identities.
Each fake SIM sold for between 200,000 and 800,000 won, generating about 1.6 billion won in profits for the group. The ringleader is believed to have earned a 30,000 won commission per SIM, in addition to profits from his phone shops.
Investigators said 18 retail stores were involved in the fraudulent activations, with seven MVNO employees allegedly approving applications based on photocopied passports and falsified forms. This violated South Korea’s strict telecom regulations, which mandate in-person identity verification for mobile service registration.
Authorities seized more than 3,400 forged application documents and over 400 SIM cards during raids, while freezing 730 million won in assets tied to the fraud. Police also requested the cancellation of 7,395 compromised phone lines linked to the operation.
At least 1,400 illicit SIMs were used in phishing scams where callers impersonated prosecutors, bank officials, or government agencies to trick victims into transferring money. Others were used to facilitate drug deals and illegal lending schemes.
South Korea has been grappling with rising losses from voice phishing crimes. According to the National Police Agency, average victim losses reached 41 million won in 2024, while nationwide losses soared to 854.5 billion won, among the highest per-capita rates in the OECD.
In response, the government introduced sweeping new countermeasures in August. These include mandatory biometric checks for SIM registration, limiting foreign passport holders to a single phone line, and holding telecom companies accountable for repeated fraudulent activations.
A police spokesperson emphasized the significance of the crackdown: “Anonymous SIMs are the starting point for crimes like phishing and drug distribution. Cutting off access to these tools is key to stopping the damage before it spreads.”
Authorities continue to investigate whether more telecom insiders were complicit in the scheme and are urging the public to report suspicious SIM registrations.
