▲ The Supreme Court of Korea
The Supreme Court has ruled that criminal proceeds can be exceptionally confiscated in cases where recovering damages for victims is difficult, such as fraud syndicates based in Cambodia.
The Supreme Court's First Division (presiding Justice Ma Yong-joo) recently finalized a lower court ruling sentencing a defendant identified as A to four years in prison and ordering the confiscation of 243.25 million won in cash for charges including fraud and violations of the Act on Regulation of Similar Receiving Businesses.
Beginning in May 2024, A joined an investment fraud organization headquartered in Cambodia and played a role in managing lower-tier members.
The syndicate attracted investors with promises of high probability profits and guaranteed principal returns through "reverse betting on football matches," but actually operated a Ponzi scheme (multi-level financial fraud) paying returns to earlier investors using funds from new ones.
A was brought to trial on charges of conspiring with other members to swindle approximately 6.1 billion won from 321 victims.
During the investigation, 243.25 million won in cash was also seized from A's residence and other locations.
The key issue was whether this cash fell under the targets of confiscation pursuant to the Act on Confiscation of Criminal Proceeds from Public Corrupt Practices.
As a rule, assets acquired from victims through property crimes such as fraud must be returned to the victims, and therefore cannot be confiscated.
However, the Act on Confiscation of Criminal Proceeds from Public Corrupt Practices classifies assets acquired from victims through fraud or assets obtained by holding and disposing of them as criminal victim assets, allowing for exceptional confiscation when victim recovery is severely difficult, such as when victims face hurdles in filing civil claims for restitution or damages.
The first instance court acknowledged A's primary charges and sentenced A to four years and six months in prison.
While viewing the seized cash as criminal victim assets, the first instance court did not order confiscation, stating it was difficult to conclude that victim recovery was severely difficult.
On the other hand, the second instance court focused on the fact that the organization to which A belonged had committed crimes methodically and laundered funds multiple times.
The second instance court pointed out, "Although the total fraud damage exceeds 6.1 billion won, the whereabouts of the remaining funds, excluding the cash attributed to the defendant, have not been clearly ascertained," adding, "Considering that the organization was based in Cambodia and laundered funds using cryptocurrencies, there is a high possibility that most of the criminal proceeds were smuggled overseas."
Taking into account factors such as settlements reached with 71 victims, the second instance court reduced the sentence to four years in prison, lighter than the first instance, while ordering the confiscation of 243.25 million won in cash for victim recovery.
The Supreme Court also dismissed the appeal, judging that there were no problems with the lower court's decision.
(Photo: Provided by Yonhap News TV, Yonhap News)
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