Detention for Fraud | A Dispute Arising from Money Borrowed from a Friend, Detention for Fraud Avoided Through a ‘Not Guilty’ Verdict

The Daeryun criminal law specialist attorney brought to the forefront the circumstance that, at the time of borrowing, the client had provided substantive collateral, such as a vehicle.

that if there had been an intent to defraud from the start, the provision of collateral would not be customary, and structured the defense in a direction that lowered the risk of detention for fraud.

The Daeryun criminal law specialist attorney emphasized that, at the time of borrowing, the client was earning a stable income and that the repayment plan was also realistically feasible.

In addition, by documenting the income structure, the flow of transactions, and the fund management plan at the time, the attorney directly contested the element of fraud that “there was no intention or ability to repay from the start.”

The Daeryun criminal law specialist attorney organized as a key issue the point that the complainant and the client had interacted over a long period and that the complainant was aware of the client's credit situation and circumstances.

In other words, the attorney systematically explained that the circumstance in which the complainant lent the money while aware of the risk could be a factor that weakened the finding of ‘deception,’ thereby creating a crack in the argument for detention for fraud.

The Daeryun criminal law specialist attorney focused on the point that the delay in repayment arose from a change in circumstances after the borrowing, in which the client failed to receive wages from the company.

This highlighted that the matter was not deception at the time of borrowing but rather default caused by an unavoidable economic situation that arose afterward, thereby blocking any interpretation leading to detention for fraud.

In cases where detention for fraud is at issue, the key is not the ‘fact of failing to repay’ itself, but rather whether there was an act of deception and the intent to defraud, which are the elements of fraud.

In general, fraud is established when a person deceives another, causes that person to make a disposition of property, and as a result obtains a pecuniary benefit.

However, in a money-lending relationship, default does not automatically constitute fraud; rather, in many cases it must be proven that, at the time of borrowing, the borrower had no intention or ability to repay and yet concealed this or deceived the other party with false facts.

Accordingly, the following factors become important points of judgment in practice.

• Whether collateral was provided at the time of borrowing: the provision of collateral may generally be assessed as a circumstance inconsistent with an ‘intent to defraud’
• Ability and plan to repay at the time of borrowing: objective circumstances such as income, assets, and transaction prospects are important
• The relationship between the parties and the other party's awareness: the circumstance that the other party transacted despite being aware of the risk affects the finding of deception
• Change in circumstances after borrowing: circumstances that were difficult to foresee and arose afterward may be reflected in the finding of ‘intent’

If a fraud charge is recognized, the offender may be subject to imprisonment for up to twenty years or a fine of up to 50 million won.

If you face the risk of detention for fraud, you should respond as follows.

If even one of the items below applies, it is necessary to check the direction of the response through a legal consultation from the early stage of the investigation.

• The amount defrauded is large, or the matter involves multiple victims
• The investigative authorities have strongly suspected fraudulent intent from the outset
• Compulsory investigation, such as account tracing or search and seizure, is already underway
• Concerns about destruction of evidence or flight were mentioned during the investigation
• There is an accomplice, or another related case is being investigated together
• No recovery of the loss or settlement has been made at all

In such a situation, it is difficult to rule out the possibility that the fraud charge will expand into a matter warranting detention. Before giving statements, please first review the structure of the case and the legal issues.

For detention for fraud, the means of response and the points of proof must be set differently at each stage in order for a substantive defense to be possible.

① The Stage Before Detention for Fraud: Blocking the Request for a Detention Warrant

Where the possibility of detention for fraud is mentioned at the investigation stage, the criminal law specialist attorney first contests the point that the structure of the matter does not satisfy the requirements for detention.

The key criteria for detention for fraud are the risk of flight, the risk of destruction of evidence, and the gravity of the crime.

The criminal attorney designs a strategy to weaken the very grounds for requesting a warrant, focusing on the client's fixed residence and means of livelihood, the record of voluntary appearance and cooperation with the investigation, and the point that objective materials have already been secured so that there is no risk of destruction of evidence.

Organizing the elements of fraud (deception, intent, and defrauding) together at this stage also has a direct effect on the subsequent determination of whether to detain.

② The Stage Immediately After Detention for Fraud: Attempting Release Through a Review of the Legality of Detention

Even where detention for fraud has already occurred, the necessity of the detention can be contested again through a review of the legality of detention.

The criminal law specialist attorney argues the impropriety of the detention, focusing on whether the determination at the time of detention was excessive in terms of the facts or the law, whether the explanation regarding the elements of fraud was sufficient, and whether the detention excessively restricts the right of defense.

In particular, in matters that are close to simple default, cases in which there is room for recovery of the loss or for negotiation, and matters in which intent and deception are at issue, the possibility of early release is actively reviewed through a review of the legality of detention.

③ The Stage of Continued Detention for Fraud: Conversion to a Trial Without Detention Through Bail

Where indictment has occurred while the client is in detention, the response is to enable the client to stand trial without detention through an application for bail.

At this stage, the criminal law specialist attorney designs bail conditions that the court can accept, comprehensively considering the possibility of conditional bail, such as residence restrictions or a travel ban, the degree of progress of the examination of evidence, and the recovery of the loss and the nature of the dispute (whether civil elements exist).

In a detention-for-fraud case, the longer the state of detention continues, the greater the burden associated with statements and the restriction on the right of defense become, so it is very important to restore the defense environment itself through bail.

A detention-for-fraud case does not end with the criminal proceedings but can spread into civil debt collection, provisional attachment, and damage to business transaction relationships, so an integrated strategy is needed from the outset.

Daeryun Law Firm has a one-stop collaboration system that, with a single retainer, reviews from multiple angles not only the criminal response but also, depending on the matter, the related civil and execution issues.

If you are concerned about detention for fraud, it is important to first organize the issues and materials rather than to judge and respond alone.

Because a response tailored to the current stage (under investigation, after indictment, during trial, and so on) is needed, please review your options through a consultation based on the circumstances of the case and the materials you hold.