Money Received as “Salary” Before Leaking Technology to China... Supreme Court: “Must Be Viewed as Payment for a Crime”

Former Researcher in “Technology Leak to China” Case
Appeals Court Declines Forfeiture; Supreme Court Overturns Ruling

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

The Supreme Court has ruled that money received before trade secrets are stolen can still be forfeited as criminal proceeds if it was paid in exchange for the crime.

According to legal circles on the 4th, the Supreme Court’s Third Division, with Justice Lee Sook-yeon presiding, recently overturned an appellate ruling that sentenced a man identified as A to three years in prison for violating the Unfair Competition Prevention Act and occupational breach of trust but imposed no forfeiture, and remanded the case to the Seoul High Court.

A is an expert in production technology for polyolefin elastomer (POE), a petrochemical material. When he left his former employer in January 2024, the company asked him to delete or return confidential business information. However, he kept the materials.

A was put in touch through a man identified as B with a Chinese company seeking the technology. Starting in September 2023, he attended meetings with the Chinese side and answered questions. After leaving his job, in January and February 2024, he twice sent B photo files of the confidential business information. In the meantime, A received 30.5 million won and $11,188 (about 13.66 million won) from B in 10 payments described as salary.

The issue was whether the money could be treated as criminal proceeds and forfeited. The Act on Regulation and Punishment of Criminal Proceeds Concealment allows the confiscation or forfeiture of property obtained through criminal activity or as payment for a crime.

The first trial sentenced A to three years in prison and ordered the forfeiture of about 45.12 million won. The appellate court upheld the three-year prison sentence but did not order forfeiture. It reasoned that most of the money had been paid before the trade secrets were handed over and that A had also attended meetings with the Chinese side and answered questions, making it difficult to regard the payments as compensation for the crime. It also said there was no evidence to calculate the proportion of the payments, even if some portion had been compensation.

The Supreme Court rejected that reasoning. Whether money is payment for a crime must be determined by whether it was paid in exchange for the crime, not by when it was paid, the court said. It also found that A’s attendance at meetings with the Chinese side and his answers were merely incidental and auxiliary acts serving the same purpose as the crime, and therefore all the money he received was subject to forfeiture.

The court ruled, “The fact that a payment was made before or after the criminal act in terms of timing alone should not readily lead to the conclusion that it was not paid in exchange for the criminal act.”

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