Financial Crime Lawyer
Financial Crime Lawyer | Understanding Charges, Statutes, and Defense Strategy
Financial crime is an umbrella term covering fraud, embezzlement, breach of trust, and money laundering, each defined separately under the Korean Criminal Act with different elements and penalties. When the amount of loss or illicit gain exceeds a statutory threshold, the case is prosecuted under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (특정경제범죄 가중처벌 등에 관한 법률), which raises the minimum sentence and often removes the possibility of a suspended sentence. Because these cases usually involve extensive financial records, bank transaction data, and contracts, how the evidence is interpreted early on has a major effect on the eventual charge and sentence.
Financial Crime | How Each Financial Crime Is Defined
Fraud, embezzlement, breach of trust, and money laundering are separate offenses with distinct elements. Which one applies to your case changes both the burden of proof the prosecution must meet and the sentencing range you face.
Fraud requires obtaining property or a pecuniary advantage by deceiving another person who then acts on that mistaken belief (형법 제347조). The prosecution must show intent to deceive existed at the time of the act, which is often the central dispute in investment fraud or loan fraud cases. A person who genuinely intended to repay a loan but later defaulted is not automatically guilty of fraud.
Embezzlement applies when a person who holds another's property in a position of trust unlawfully takes it for their own use or refuses to return it (형법 제355조 제1항). This commonly arises with company funds handled by an employee, executive, or partner. Whether the funds were used for personal purposes or for the business itself, and whether there was intent to permanently deprive the owner, are the key factual issues.
Breach of trust involves a person entrusted with the affairs of another causing pecuniary loss by acting against that duty for their own or a third party's benefit (형법 제355조 제2항). It frequently appears in disputes among corporate directors, business partners, or agents handling a transaction. Establishing that a duty existed and that the defendant's conduct actually caused loss is often more contested than in embezzlement cases.
Money laundering covers concealing or disguising the criminal origin of proceeds, or transferring them through complex transactions to obscure their source (범죄수익은닉의 규제 및 처벌 등에 관한 법률). It is usually charged alongside an underlying predicate offense such as fraud or embezzlement rather than standing alone. Whether the defendant knew, or should have known, that the funds were criminal proceeds is the central issue.
One Incident Can Trigger Multiple Charges
A single set of facts can be charged as fraud and breach of trust together, or as embezzlement with a separate money laundering charge for how the funds were later moved. Because each charge has its own elements and sentencing range, how the indictment characterizes the underlying conduct is something worth scrutinizing from the earliest stage of investigation.
Financial Crime | When the Act on Aggravated Punishment of Specific Economic Crimes Applies
The amount of loss involved is often more decisive than the underlying offense itself, because it determines whether the case is prosecuted under the ordinary Criminal Act or the special aggravated statute.
Threshold Amounts and Sentencing Tiers
Under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, fraud, embezzlement, or breach of trust involving a loss of 500 million won or more carries imprisonment of at least three years, and a loss of 5 billion won or more carries a minimum of five years, up to life imprisonment (특정경제범죄 가중처벌 등에 관한 법률 제3조). These minimums make it structurally harder to obtain a suspended sentence compared to an ordinary Criminal Act charge for the same conduct. The way the loss amount is calculated, including whether disputed or already-repaid amounts are included, is frequently litigated.
Why the Calculated Amount Is Often Contested
The prosecution's stated loss amount is not always accurate, particularly when it includes amounts that were later returned, disputed contractual claims, or double-counted transactions across multiple victims. Because crossing the 500 million or 5 billion won line changes the applicable sentencing floor, disputing the calculation method itself can be a meaningful part of the defense. Bank records, accounting ledgers, and expert financial analysis are often needed to challenge the figure the prosecution relies on.
Aggregation Across Multiple Victims or Transactions
Courts have taken the position that amounts from multiple victims or multiple transactions can be aggregated when they arise from a single overarching scheme, which can push a case that would otherwise stay under the ordinary Criminal Act into aggravated territory. Whether separate transactions truly form one continuous scheme, or are in fact distinct and unrelated acts, is a factual question that a Seoul financial crime lawyer often examines closely when reviewing the indictment.
Financial Crime | Sentencing Factors and Realistic Outcomes
Courts weigh a range of factors beyond the statutory minimum, and the practical difference between a suspended sentence and actual incarceration often comes down to how these factors are documented.
Restitution and Victim Settlement
Whether the defendant has repaid the victim, in whole or in part, and whether a settlement or withdrawal of the complaint has been reached, is consistently treated as a significant sentencing factor in fraud and embezzlement cases. Because these are not offenses that require the victim's complaint to prosecute in most cases, a settlement does not guarantee dismissal, but it materially affects sentencing. Documenting the timing and amount of any repayment carefully matters for the record.
Prior Record and Number of Victims
A prior conviction for the same type of offense, or a case involving numerous victims such as an investment fraud scheme, tends to push sentencing toward the higher end of the applicable range. Conversely, a first offense with a limited number of affected parties and a clear, isolated set of facts is treated differently. This is one reason the specific charge and its scope should be reviewed carefully rather than accepted at face value.
Corporate Context and Employer Liability
When the alleged conduct occurred within a company, the roles of co-workers, supervisors, and corporate approval processes can affect whether a single employee is treated as the sole responsible party or as one participant in a broader scheme. Internal audit findings, approval logs, and email records often become central evidence in disputing the scope of individual responsibility.
Financial Crime | From Initial Consultation to Case Resolution
The first step is reviewing the specific allegation, any documents already in the client's possession, and the current stage of the case, whether it is a police investigation, prosecutorial review, or trial.
This includes preparing for police questioning, reviewing seized financial records, and where relevant, submitting a written opinion on how the loss amount or the elements of the offense should be characterized.
Before indictment or at the early stage of trial, the specific charge selected (fraud, embezzlement, breach of trust, or a combination) and the calculated loss amount are reviewed, since either can determine whether the aggravated statute applies.
Depending on whether the core dispute is about intent, the existence of a fiduciary duty, or the loss calculation, the defense strategy is built around cross-examining financial evidence, expert accounting review, or witness testimony.
Where liability is not seriously contested, the focus shifts to restitution, settlement with the victim, and presenting mitigating factors to the court for sentencing.
Financial Crime | How Fees Are Structured
Generally set based on the stage of the case (investigation only, or investigation through trial), the complexity of the financial records involved, and whether multiple charges or victims are involved.
If used, this is typically structured around the specific outcome achieved, such as a non-indictment decision, a reduced charge, or a suspended sentence, and is agreed upon separately from the retainer.
Cases with disputed loss amounts often require an outside accountant or financial expert to review transaction records, which is billed separately from the legal fee depending on the volume of data involved.
Court filing fees, document copying costs, and expenses related to obtaining financial transaction records are billed as actual costs incurred.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
Financial Crime | Self-Check Before Your Consultation
1️⃣ If You Are Under Investigation for Fraud
- Did you have a genuine intent and ability to repay or perform at the time of the transaction?
- Is there written correspondence (texts, emails) showing your state of mind at the relevant time?
- Has the alleged victim filed a civil claim in addition to the criminal complaint?
- Do you know the specific loss amount the complaint alleges?
2️⃣ If You Are Under Investigation for Embezzlement or Breach of Trust
- Was there a company policy, contract, or board resolution defining your authority over the funds?
- Can you document that the funds were used for a business purpose rather than personal gain?
- Were other employees or executives aware of or involved in the same transactions?
- Do you have access to the accounting records covering the relevant period?
3️⃣ If Money Laundering Is Also Alleged
- Did you know, or could you reasonably have known, the source of the funds you handled?
- Can you trace the specific transactions the prosecution points to as concealment?
- Is the money laundering charge based on an underlying offense you are also charged with?
4️⃣ If the Aggravated Punishment Act (특정경제범죄법) May Apply
- Does the alleged loss amount reach 500 million won or 5 billion won?
- Does the calculation include amounts already repaid or still disputed?
- Are multiple victims or transactions being aggregated into a single total?
