Fraud Attorney | Client Accused of a 700 Million Won Fraud Charge, Non-Referral Decision

The claims of the complainants who filed a criminal complaint against the client on a fraud charge are as follows.

The client was operating three vehicle repair shops at the same time.

The client, who said that the funds needed for operation were insufficient, told complainant A, "The equipment needed for repairs is insufficient and must be purchased, so lend me the related sum in cash. As interest, I will give 1 million won for every 100 million won," and borrowed 300 million won.

The client also contacted complainant B personally about 7 years ago and said, "I urgently need money, so if you lend it to me, I will return it quickly," and received 50 million won.

While he had not repaid this, the client contacted complainant B again one year later and said, "A problem has arisen in connection with the business operation, so if you lend me 150 million won more, I will repay 200 million won together with the 50 million won previously lent, including interest," and borrowed money again.

The client did not repay this either, and four years later contacted complainant B again and said, "I am trying to purchase a new repair shop but the funds are insufficient, so lend me more money. If I cannot repay, I will transfer the title to one of the repair shops," and borrowed 200 million won.

The client did not repay the borrowed money, and complainants A and B claimed that, through the client's deceptive act, they had each been defrauded of approximately 300 million won and 400 million won in funds, and filed a complaint on a fraud charge.

Accordingly, the client requested the assistance of the fraud attorney in order to clear the charge.

1) Denial of the elements of the crime of fraud according to Supreme Court precedent

The fraud attorney cited Supreme Court precedent rendered on April 28, 2016, case 2012Do14516, which held that 'whether the crime of fraud is established is judged as of the time of the act, and if, at the time of borrowing money in a transaction, a person had the intention and the ability to repay, this is merely a civil non-performance of obligation and the criminal crime of fraud is not established.'

Accordingly, the fraud attorney collected text messages and email records sent by the client containing the content 'I will definitely repay' and the like, and emphasized that the client had no intention to deceive the complainants and had a clear intention to repay.

2) Emphasis that the client had paid a certain amount of return

The fraud attorney proved, through bank transfer records and the like, that the client had paid complainant A 10 million won of principal, and complainant B 40 percent of the repair shop's profits as interest.

Accordingly, the attorney emphasized the point that the client had already repaid a certain amount to the complainants and that the complainants had not raised any objection to this at the time, and argued that this could not be charged as the criminal crime of fraud.

The investigative authorities comprehensively considered the following points.

① Deceptive act

A deceptive act refers to an act of stating content different from the facts in order to deceive the other party, or of concealing an important fact that should be disclosed in a monetary transaction.

Not only an active lie but also intentional silence may constitute deception.

② Mistake of the victim

This refers to a case where, due to the deceptive act, the victim comes to mistakenly believe a fact and, as a result, comes to make a decision to dispose of property.

③ Pecuniary loss

A pecuniary loss refers to a case where the victim who has fallen into a mistake incurs an economic disadvantage by disposing of property.

However, there are also cases where an infringement of property is recognized by the act of disposition itself.

The sentence for the crime of fraud was previously imprisonment for up to 10 years or a fine of up to 20 million won.

However, as the Criminal Act was amended effective December 23, 2025, the sentence for the crime of fraud was raised.

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

1) Defense Centered on the Legal Absence of Intent to Deceive

The fraud attorney examines whether the charge can be established by focusing on whether the client had the intention and the ability to repay at the time the funds were received.

On this basis, the attorney responds by emphasizing that there was no intentional deception.

2) Securing Objective Materials in Cooperation with the In-House Evidence Investigation Center

The fraud attorney cooperates with the in-house evidence investigation center to systematically organize objective evidence such as contracts, account flows, message and call records, and business operation materials.

Through this, the attorney arranges the process of receiving funds and the subsequent conduct in chronological order, and submits structured materials so that the investigative authorities do not misapprehend the facts.

3) Establishing a Response Strategy for Each Investigative Stage and Managing Statements

From the police investigation stage, the attorney organizes the direction and logic of the statements to prevent unnecessary misunderstanding or disadvantageous situations caused by retractions of statements.

If necessary, the attorney comprehensively reviews the possibility of settlement, the repayment plan, and the timing for submitting materials showing remorse.

Depending on the complexity and scale of the matter, our firm forms a task force of one to twenty members, including a fraud attorney and a criminal law specialist attorney, to respond.

If you are facing fraud charges, it is advisable to obtain the assistance of a fraud attorney through a 🔗legal consultation appointment.