Crime of Fraud

① Act of Deception

This refers to the act of stating false facts in order to deceive another person, or concealing an important fact that must be disclosed.

Supreme Court Decision 82Do3139, decided February 22, 1983

② Mistake

This is a case in which, due to the act of deception, the other party mistakenly believes a fact and, accordingly, makes a decision such as disposing of property.

③ Pecuniary Damage

Damage must actually occur as a result of the victim falling into a mistake and disposing of property.

However, where the disposal act itself constitutes a recognized infringement of property, the crime of fraud can be established regardless of whether damage has occurred.

▷ Simple Fraud

The crime of fraud is a property crime of deceiving a person to receive property or acquire a pecuniary benefit.

Example)

▷ Habitual Fraud

Habitual fraud means the act of repeatedly committing fraud, and it is punished more heavily than ordinary fraud.

▷ Fraud by Use of a Computer

The crime of fraud by use of a computer is a crime of acquiring a pecuniary benefit by inputting false information into a computer or other data-processing device, or by altering information without proper authority.

Example)

▷ Quasi-fraud

Quasi-fraud is a crime that is established by exploiting a person's mental disorder to receive property or acquire a pecuniary benefit.

Example)

▷ Embezzlement

This is a crime in which a person who keeps another person's property uses that property for personal benefit or fails to return it.

▷ Breach of trust

This is a crime in which a person who handles another person's affairs acts in violation of their duty for personal benefit and thereby causes financial loss to the other person.

In the case of habitual fraud, the sentence may be aggravated by up to one-half.

If the amount of profit obtained through the crime of fraud is 500 million won or more, the offender is subject to punishment under the Act on Aggravated Punishment of Specific Economic Crimes.

Act on Aggravated Punishment of Specific Economic Crimes Article 3

The statute of limitations for prosecution of the crime of fraud varies depending on the law applied according to the scale of the damage.

If the amount of damage is less than 500 million won, the case is treated as fraud under the general Criminal Act, and a statute of limitations for prosecution of 10 years applies.

In contrast, if the amount of damage is 500 million won or more, the Act on Aggravated Punishment of Specific Economic Crimes applies, and the statute of limitations for prosecution may be extended to up to 15 years.

The period of the statute of limitations for prosecution may therefore differ depending on the scale of the damage, and this point should be noted.

Crime of Fraud

The crime of fraud is established only when an intentional deceptive act and the acquisition of a financial benefit are proven.

Relevant evidence, such as contracts, transaction records, and the content of conversations, should therefore be thoroughly secured and analyzed.

Doing so can be important for rebutting the allegations or preparing evidence favorable to oneself.

Attempting to reach a settlement with the victim can play an important role in reducing the level of criminal punishment.

It is advisable to seek a settlement by repaying the amount of the damage or paying consolation money, and it is helpful to receive the assistance of an attorney during the settlement process.

From the police investigation stage, consistency of statements should be maintained, and where the allegations are denied, they should be rebutted logically.

During the prosecutorial investigation and trial, one should clearly explain one's position and respond actively.

It is also important to acknowledge one's wrongdoing and demonstrate an attitude of genuine repentance.

Submitting a letter of apology and a petition to ask the court for leniency may also be considered.

The facts of the damage should be organized in detail, by date, including the date and place of the incident and the content of the conversations exchanged with the other party.

Contracts, text messages, call recordings, bank transfer records, and the like all materials that can prove the fraud damage must be secured, and it is important to back up and store digital materials separately so that they are not deleted.

After organizing the facts of the damage and the evidence, the criminal complaint should be prepared by referring to the complaint form available at the competent police station or on the National Police Agency website.

The complaint should set out the personal details of the accused, the facts of the damage, the circumstances of the offense, and the content of the damage specifically and clearly, and a list of evidentiary materials that can support the complaint as well as copies of the evidence should be attached.

The completed complaint should be submitted directly to the police station with jurisdiction over the address of the accused or the place where the offense occurred.

Once the criminal complaint is received, an assigned investigator will conduct an examination of the complainant.

During the examination, statements based on the facts should be made consistently, and the secured evidence should be actively submitted.

If necessary, a summons examination of the accused may also be conducted.

If the police investigation finds that the allegations are established, the case is referred to the prosecution.

The prosecution conducts additional investigation or decides whether to indict, and it is necessary to continue to monitor the situation regarding the subsequent procedures.

A victim who has suffered harm from fraud can claim damages through a civil lawsuit.

A civil lawsuit proceeds separately from the criminal complaint, and it is a procedure for recovering financial loss regardless of the criminal punishment of the offender.

Through this, the victim can be compensated for the loss caused by the fraud.