CONTENTS
- 1. The Story of the Client Who Was Subjected to Investment Fraud
- - Details of the Client's Contract
- - Why Damage Relief Is Needed
- 2. Explanation of the Concept of Investment Fraud
- - How to Obtain Relief for Fraud Damage
- 3. The Specialized Attorney Who Set Out to Respond to the Investment Fraud
- - Establishment of a Tort
- - Liability for Damages
- 4. Investment Fraud Damage Relief Outcome
1. The Story of the Client Who Was Subjected to Investment Fraud
This is the account of a client who requested relief for investment fraud damage.
The client received a proposal from an acquaintance with whom he was usually close, who said that he was working as an art dealer at an art-tech company and asked whether the client would like to generate profits through art-tech.
The acquaintance told the client that if he purchased a work, the company would pay a certain percentage of the price difference each month, and when the contract expired, the company would repurchase the work and return the principal.
The client therefore decided to invest, and after entering into an art trading and consignment activity contract with the acquaintance's company, he paid a total of 100 million won.
Details of the Client's Contract
The contract between the client and the acquaintance's company was as follows.
If the work has not been sold by 30 days before the maturity date arrives, the buyer may request the seller to resell the work.
That is, when the buyer purchases the work and leases the work while reserving the rights to use and sell the work to the seller, the seller leases and exhibits the work to earn profit and shares the profit with the buyer.
Thereafter, once the contract period passes, this was a kind of artwork consignment rental contract in which the work is repurchased to guarantee the principal.
Why Damage Relief Is Needed
The client received a certain percentage of the market price difference for some time, but from a certain day the acquaintance notified the client that, due to financial difficulties at the company, it was not only difficult to pay the market price difference but also impossible to repurchase the works.
The acquaintance also repeated only the words that the client should simply wait, saying that the works would be sold and the sale proceeds returned.
However, just one week earlier, the acquaintance's company had sent the client a text message inducing investment.
The client therefore determined that the client had been the victim of investment fraud, and came to this firm seeking to recover the invested amount by filing a damages lawsuit.
2. Explanation of the Concept of Investment Fraud
Investment fraud literally refers to a fraudulent act of receiving money by enticing a person with promises of generating profits.
Here, 🔗the crime of fraud refers to the criminal act of acquiring a pecuniary benefit by deceiving a person.
Most investment fraud falls under Ponzi schemes. A Ponzi scheme is a method of multi-level financial fraud that, while generating almost no actual profit, gathers new investors who expect returns and uses their investment funds to pay returns to existing investors.
How to Obtain Relief for Fraud Damage
If you have suffered such investment fraud or Ponzi scheme harm, you should report the harm to the investigative authorities right away.
Filing a report does not mean that the harm can be remedied, but it can be used as a means of psychological pressure to bring about a settlement amount and similar outcomes.
If you apply for a compensation order together with a criminal complaint, you may recover the harmed funds without civil litigation, but if the application is dismissed or rejected, civil litigation must be used.
When filing a civil suit, the case can be resolved quickly if there is concrete evidence that fraud occurred (such as the content of conversations and transfer records).
The most reliable way to obtain a remedy for fraud harm is to retain an attorney with extensive related experience.
This firm presents strategies tailored to the remedy of the client's investment fraud harm.
3. The Specialized Attorney Who Set Out to Respond to the Investment Fraud
For the client who suffered harm from investment fraud, the specialist attorney filed the complaint, arguing as follows.
Establishment of a Tort
The client's acquaintance and the relevant company had been conducting business by using the form of selling artworks for the purpose of soliciting investment funds, while lacking sufficient intent or capacity to actually operate an art rental business.
While selling artworks to the client, the acquaintance recommended the investment, explaining that the client would be granted the authority to lease, exhibit, and sell the works, would be paid rental profits as distributions, and could recover the principal through repurchase at maturity.
The acquaintance's company agreed to pay distributions equivalent to 1% per month upon entering into the agreement with the client, but that profit structure may be assessed as a condition that is difficult to sustain through ordinary business activities alone.
In addition, during the conclusion of the agreement, the principal guarantee was emphasized while the specific details of the profit structure and the method of business operation were not sufficiently explained, and as a result the client came to purchase the relevant artworks.
In such a case, whether the conduct constitutes deception and whether the crime of investment fraud is established are determined by comprehensively reviewing matters such as whether important matters were disclosed in the course of the transaction, the content of the explanation, and the circumstances of the investment solicitation.
Liability for Damages
Therefore, the acquaintance and the acquaintance's company are liable to compensate the client for the loss caused by the tort.
According to Supreme Court Judgment 2010Da91091, the amount of loss sustained as a result of an act of fraudulently obtaining a loan should, absent other special circumstances, be regarded as the amount of the loan delivered at the time of the tort.
The same applies to investment funds, so the acquaintance's company is liable to compensate the full amount of 100 million won that the client deposited at the time of the contract.
Based on these facts, the specialist lawyer requested that judgment be rendered ordering the acquaintance's company to compensate the client 100 million won in investment fraud damage.
4. Investment Fraud Damage Relief Outcome
As a result of the attorney's assistance for the client, the court rendered a judgment ordering the company of the client's acquaintance to pay 100 million won to the client.
The client was able to conclude the matter by recovering the full amount of the investment fraud loss.
Seeking to hold the acquaintance and the acquaintance's company criminally liable as well in this matter, the client is also proceeding with criminal complaint procedures through the firm's one-stop response system.
Daeryun, ranked 9th among law firms in the Republic of Korea (based on 2025 National Tax Service value-added tax filings), draws on its experience in resolving monetary fraud cases such as investment fraud, Ponzi schemes, and romance scams to establish and provide a response strategy suited to each client's case.
If you are in a situation requiring relief from fraud damage, please proceed with a 🔗legal consultation booking right away.
This content is based on actual case studies of Daeryun Law LLC with some adaptations, and the copyright belongs to our firm.
Unauthorized reproduction, duplication, or distribution and other copyright infringements may result in legal action under applicable laws.
