The Supreme Court is reviewing punitive standards to eradicate evolving fraud crimes such as rental fraud, voice phishing, and monetary and multi-level fraud.
The Supreme Court Sentencing Committee plans to hold a full meeting on the 29th and review sentencing standards for fraud crimes in line with public sentiment. That’s because there is much criticism that current sentencing standards, which have not changed once in 13 years since they were established in July 2011, are out of step with reality and result in lenient punishment.
Over the past 10 years, fraud crimes have increased significantly and their forms have become more diverse. However, compared to rapidly evolving criminal methods, the system to catch them, punish them and pay damages is inadequate. The amount of damages in 2022 amounts to 29.3412 trillion won, but only 3-4% of this amount is recovered from victims. This means that most of the money was taken by scammers. It’s an asymmetric structure where the level of punishment is low even if you get caught, and you benefit greatly if you don’t get caught.
The Sentencing Commission plans to add new sentencing standards for voice phishing scams, which have increased rapidly recently. We intend to reflect the punishment standards in accordance with the “Special Law on Prevention of Harm from Telecommunications and Financial Fraud and Reimbursement of Damage” adopted in November last year, while finalizing a plan to increase the recommended punishment itself in second half of the year.
Seo Jun-bae, professor at the National Police University, said: “In addition to strengthening punishment standards, all-round measures are needed, such as early crime prevention and an alert system to minimize harm “, adding: “Overseas cases such as Singapore, which has established a fraud response center and increased the damage recovery rate to 25%. “It is necessary to refer to,” he said enlarged
Convicted of Yuan Fraud, Sentenced to 100 Years in Prison by US Government… 15 Years of “Remaining Business” in Korea
41% of arrested fraudsters are repeat offenders… We also need to review the rules for criminals with two or more offences.
#One. Mr. A, the main culprit in the “three mothers and daughters rental fraud case” who stole 79.5 billion won in rental deposits from 355 tenants in Seoul’s Gangseo and Gwanak-gu areas, was sentenced to 10 years in prison in the first trial in July last year.
#2. The CEO of a real estate consultancy firm known as the mastermind behind the “Villa King Jeong” case, a large-scale fraud that occurred in Gangseo and Yangcheon-gu, Seoul, was recently sentenced to eight years in prison in an appeal trial despite stealing 8 billion won from 37 people.
The punishment given to criminals responsible for jeonse fraud, which has emerged as a social problem in recent years, is only 10-15 years. This is because the maximum penalty under the law for fraud is only 15 years, and the legal system measures the punishment based on the amount of damage per victim, even if the damage amounts to tens of billions of won. It highlights the need to make punishment for fraud realistic in order to eliminate the stigma of being a “republic of fraud”.
The crime of fraud has become a “surplus business”
According to the criminal analysis statistics of the Prosecutor’s Office on the 28th, of the 176,623 fraudulent criminals arrested in 2022, repeat offenders accounted for 41.3% (72,997 people). Among repeat offenders, 45.5% (33,205 people) are repeat offenders who commit the same type of crime again. The rate of repeat offenders in the same category is increasing, reaching 39% in 2019, 40.1% in 2020 and 42.4% in 2021.
This is because the punishment for committing the same fraud again is very weak. According to the sentencing standards of the Supreme Court, the basic sentencing standard for general fraud is 6 months to 1 year and 6 months when the fraud amount is less than 100 million won, and 1 to 4 years when the The amount of fraud is between 100 and 500 million won. If the fraud amount is between 500 and 5 billion won, the standard punishment is 3 to 6 years, while if the fraud amount is between 5 and 30 billion won, the standard punishment is 5 to 8 years. If the fraud amount is 30 billion won or more, the basic sentence is 6 to 10 years, and if aggravating factors such as multiple victims are taken into consideration, a maximum of 19.5 years is possible, but the effective legal punishment is limited to a maximum of 15 years.
Under the current law, when the amount of fraud damage is more than 500 million won, the Law on Aggravated Punishment of Specific Economic Crimes (Special Police Law) applies. If the fraud amount is more than 500 million won, the person is sentenced to a prison sentence of more than 3 years, and if the fraud amount exceeds 5 billion won, the person is sentenced to life imprisonment or strict. However, even when the same crime is committed against multiple victims, it is emphasized that it is less effective because the decision to apply the special police law is based on the extent of harm per victim. For example, considering that the average deposit amount for victims of rental fraud is 140 million won, it is practically difficult to impose severe punishment by applying the Special Police Law.
No matter how large the total damage is, deciding whether to apply the special police law based on the amount of damage per victim is also considered problematic. A criminal lawyer explained: “The system needs to be improved to eradicate multiple fraud crimes” and “Considering the social impact of fraud crimes under the Special Police Law, if there are many victims, it should be considered an aggravating factor in the sentence.”
The “only half aggravating” concurrent crime rule also needs to be reviewed.
The concurrent crime rule, which imposes only half the maximum sentence across multiple charges when a person commits two or more crimes, is also cited as a reason why aggravated punishment is difficult. For example, in the case of fraud, which according to current legislation provides for a maximum sentence of 10 years in prison, even if two or more crimes are committed, the sum of the five years brings the maximum sentence provided by law to 15 years.
On the other hand, American criminal law uses a sentence sum method. Depending on the number of crimes committed, sentences of up to hundreds of years in prison can be imposed. In fact, Bernard Madoff, former chairman of the Nasdaq stock exchange, who committed a multi-level financial fraud during the 2008 financial crisis and caused damages of 65 billion dollars (about 83 trillion won), was sentenced to 150 years of prison in 2009 and died in prison after 12 years.
Han Sang-hoon, president of the Korean Criminal Justice Society, said: “The current simple aggravation method for concurrent crimes has limitations in protecting victims,” and added: “We should consider introducing a compromise method that sets a maximum limit to the range of aggravated sentences and adds sentences based on the number of crimes”.
Fraud detection rate is halved
The lack of investigative power of investigative agencies also encourages fraudulent crimes. This phenomenon became evident after the adaptation of the investigative powers of prosecutors and the police (amendments to the Law on Criminal Procedure and the Law on the Prosecutor’s Office), which limited the direct involvement of the public prosecution in economic crimes to fraud involving large sums of 500 million won. or more. This is because the prosecutor’s investigative authority has been reduced and the judge must rule in a situation where the scope of the evidence has been significantly reduced. According to the National Police Agency, the rate of arrests for fraud, which until 2019 had remained around 70%, fell to 61.4% in 2021 and to 58.9% the following year when the law was implemented. adaptation of the investigative powers of the prosecutor’s office and the police. A former prosecutor and head of a government agency pointed out: “As the perception spreads that investigative agencies lack the capacity to investigate fraud crimes, the incidence of fraud crimes is likely to increase.”
Reporter Heo Ran/Min Kyung-jin/Park Si-on min@hankyung.com
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