Supreme Court: "Confiscation of Cash Seized from Cambodia Investment Fraud Ring Member Is Justified"

Court recognizes exception for confiscation when “recovery for victims is extremely difficult”

The Supreme Court has ruled that money taken from victims may be confiscated even if it is difficult in practice for them to trace its flow, given the possibility that the proceeds of crime were transferred overseas.

The Supreme Court in Seocho-gu, Seoul. Yonhap News

According to legal circles on October 22, the Supreme Court’s First Division, presided over by Justice Ma Yongju, recently upheld a lower court ruling sentencing Mr. A to four years in prison and confiscating cash seized from him. He had been indicted on charges including fraud and violating the Act on the Regulation of Conducting Fund-Raising Business Without a Permit.

Mr. A managed members for an investment fraud ring based in Cambodia, organizing their names, membership levels and investment amounts and responding to inquiries. The ring recruited investors by pitching investment products associated with famous overseas resorts and groups, claiming that betting on the opposite outcome of soccer matches would yield profits with a roughly 93.75% probability and that the principal was guaranteed. In reality, it was a Ponzi scheme that paid returns to earlier investors with money from new investors. Mr. A was accused, among other things, of conspiring with members of the ring to defraud 321 people of approximately 6.1 billion won.

The issue was whether approximately 243.25 million won in cash seized from Mr. A’s home and vehicle could be confiscated. As a general rule, property obtained by taking money from victims through crime is not subject to confiscation. The Act on Special Cases Concerning the Confiscation and Recovery of Corrupt Property allows such property to be confiscated as an exception only when “recovery for victims is extremely difficult.”

The first trial sentenced Mr. A to four years and six months in prison. It treated the seized cash as property obtained through the crime but did not confiscate it, finding that it was difficult to conclude that recovery for victims would be extremely difficult. The second trial reduced his sentence to four years in prison and ordered the cash confiscated.

The Supreme Court likewise found no error in the lower court’s ruling. It first upheld the lower court’s finding that the seized cash was not Mr. A’s own property but property obtained through fraud and other criminal acts.

The court found that the amount of losses was large and that the organization, based in Cambodia, had systematically laundered the funds, making it possible that a substantial portion of the proceeds of crime had been transferred overseas. In practice, it would be extremely difficult for the victims to trace the flow of their money individually and exercise their civil rights, the court said. It therefore concluded that the requirements for exceptional confiscation under the Act on Special Cases Concerning the Confiscation of Corrupt Property had been met.

This content was produced with the assistance of AI translation services.