▲ The Supreme Court of Korea
The Supreme Court has ruled that profits earned by a landlord who rented out a motel and collected monthly rent, knowing that the property was being used for prostitution, are subject to confiscation.
The Supreme Court's Third Division (presiding Justice Oh Seok-jun) overturned the lower court's ruling, which did not order confiscation in the case of a defendant identified as A, who was indicted for violating the Act on the Punishment of Acts of Arranging Sexual Traffic, and sent the case back to the Seoul Central District Court.
In May 2017, A purchased a motel in Gwanak-gu, Seoul, and took over the lease agreement with the previous tenant, identified as B.
At the time of the acquisition, B already had a record of being cracked down on and penalized for arranging prostitution, and was cracked down on again after the acquisition, resulting in an order to close the business in March 2018.
A was put on trial on charges of arranging prostitution by leasing the motel to B from July 2019 to October 2022 and providing a venue for prostitution, despite knowing these facts.
A was found guilty in both the first and second trials, receiving a sentence of one year in prison suspended for two years.
The divergence between the first and second trial rulings concerned whether rental income, including monthly rent, could be regarded as criminal proceeds and thus subject to confiscation.
The building deposit was 250 million won, and the monthly rent received by A ranged from 5 million won to 9.5 million won.
The first trial court ruled that the entire sum of 232.7 million won, combining the deposit and monthly rent, was subject to confiscation.
However, the second trial court took a different view regarding the confiscation.
It reasoned that due to the nature of the lodging business, regular guests and prostitution customers were mixed together, making it difficult to view the entire rent as criminal proceeds and impossible to specifically identify the criminal earnings.
The Supreme Court reversed the second trial's ruling once again, stating that the equivalent amount of rent is subject to confiscation.
The Supreme Court judged that the subject of confiscation in this case was "not the revenue generated from motel room sales by B, but the equivalent amount of rent received by A in exchange for providing the land and building."
It stated that the confiscation of the rent equivalent cannot be denied simply because the lodging fees of regular guests have not been specifically identified.
Because the lower court failed to order confiscation altogether—meaning the confiscation portion could not be severed and addressed separately—the Supreme Court overturned the lower court's judgment in its entirety and remanded the case for a new trial.
(Photo: Yonhap News)
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