A criminal lawyer says we need to be careful about fraud charges as fraud becomes more sophisticated.

Among the many cases I have encountered while working as a representative attorney at a law firm and a criminal lawyer specializing in criminal cases, one particularly frequent one is fraud.

‘Guaranteed to double the principal in one year!’ Is this really possible? Not so.

As the number of individual investors who saw the crisis in production and consumption as an opportunity due to the coronavirus has increased, the fraud methods targeting them have become more sophisticated, requiring caution.

Unlike bank savings, there is no limit to the profits you can make from investments. Sometimes, you can earn profits that are several times the original amount. Fraudulent crimes under the pretext of such investments are rampant.

Even though Mr. A received money as investment money from investors across the country, including Seoul, Incheon, Daejeon, Daegu, Busan, Gwangju, and Ulsan, he intended to use it for personal purposes or pay it to other investors in a so-called 'turnaround' method. Even though he had no intention or ability to return the principal and profits, he pretended to be an employee of a fund company and deceived investors directly that the principal and profits were guaranteed, or by introducing other investors through existing investors. By deceiving the investor, he received 9.8 billion won in investment money from the investor.

As a result, victims suffered damages ranging from tens of millions of won to billions of won.

The court initially ruled that Mr. A's act of recruiting investors and receiving money while he had neither the intention nor ability to invest constituted fraud.

Since the amount amounted to 10 billion won, it was judged that the nature of the crime was serious, and Mr. A was sentenced to 8 years in prison and 30 years in prison under the Act on Aggravated Punishment for Specific Economic Crimes.

A representative example of this is a fraudulent method that attracts investors with the lure of high profits without investing actual capital, then collects the principal from those who invest later and pays the profits to those who came before.

An act of deceiving a person to receive property or obtain financial benefits is punishable as fraud. If a crime is established, the person is subject to imprisonment for up to 10 years or a fine of up to 20 million won.

Depending on the amount defrauded from the fraud and the amount of profits obtained from the crime, the Specific Economic Crimes Aggravated Punishment Act is applied and the punishment varies. If the profit is between KRW 500 million and less than KRW 5 billion, the person is sentenced to a fixed-term prison sentence of 3 years or more, and if the profit is more than KRW 5 billion, the person is sentenced to imprisonment for more than 5 years or life imprisonment.

The deception used to constitute the crime of fraud is to lead a person into a mistake, and it does not matter at what point the mistake occurred. Since it does not necessarily have to be a mistake regarding an important element of a legal act, even if the deceptive expression of intent is invalid under civil law, it does not affect the establishment of a private crime.

As for the means and methods of deception, it does not matter whether they are based on words, actions, or omission, such as intentionally not informing the other party of the truth even though he or she knows that he or she is already mistaken.

And it is necessary to acquire the property through the other party's act of delivery, that is, the act of disposition.

Also, the person being deceived and the person suffering property damage do not need to be the same. Therefore, even if a wife is deceived and steals the husband's property, it is considered a crime of fraud.

Therefore, if you have been the victim of an investment fraud, it is necessary to first determine the possibility of a crime by reviewing with a criminal lawyer with extensive experience in fraud cases whether there was an act of deception, whether there was a mistake as a result, the victim's property disposition, and the resulting damages and property profits.

Lastly, proceeding with a criminal trial can only result in the other party being punished, and in order to recover the damages suffered by the victims, they must file a separate investment fraud complaint and claim compensation for damages.

It is necessary to proceed with the procedure safely after taking measures such as provisional seizure and provisional disposition on the other party's property.

Written by: Shim Jae-guk, Representative Attorney, Daeryun Law Firm (Limited)

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