The operations of Busan Savings Bank, the country's biggest savings bank, and its four affiliates (the banks) were suspended in February 2011. A property market slump was started in the 2008 global financial crisis, but the banks continued to focus on project financing (PF) loans, which were generally unsecured without any collaterals and related to high risks and high returns. The banks' assets were seemingly increased, but the delinquency rates for PF loans rose and the loans are defaulted. The banks were discovered to have extended massive illegal loans to their major shareholders using special purpose companies (SPC), which were established by the management with a conspiracy. The original role of the banks is to provide low-income wage earners and small businesses with savings and loan services as a local financial institutions, but the banks were used as a private fund. The banks committed financial statements frauds and then issued and sold a lot of subordinated bonds, which were unprotected from losses caused by a bank's inability to pay its debts when due under the depositor protection act. The instruments could generate a higher Bank for International Settlements (BIS) ratios, a measure of capital adequacy ratio, over 5 percent of the government's recommendation. The ripple effects from fraudulent profits resulted in a wide variety of frauds. There are countless victims of the banks' scheme and corruptions. External auditors neither detected massive illegal loans nor accounted an appropriate level of allowances for doubtful accounts to estimate how much the receivables would not be collected and to exclude that amount from being recognized on the income statement. The savings bank which started as mutual credit funds began to grow using the relaxed regulations to offer high interest rates to attract deposits and to expand risky loans and investments. Poorly designed laws, the regulatory incompetence and the connivance of irresponsible authorities have also resulted in the banks' widespread corruptions. This study is to analyze the causes and effects of the banks' corruptions and irregularities using the case of the banks, the biggest corruption case of savings banks, furthermore this case is used for an education to detect and prevent accounting frauds. We expect contributions to improve accounting transparency of savings banks and to establish effective regulations.