Fraud Defense Lawyer
Fraud Defense Lawyer | Understanding intent, civil-criminal boundaries, and sentencing exposure
Fraud under Korean law (형법 제347조) requires that you deceived someone and, through that deception, obtained property or a financial benefit for yourself or a third party. If the prosecution cannot prove you had the intent to deceive at the time of the transaction, the matter is usually a civil debt or breach of contract issue, not a crime — even if you never paid the money back. Once the amount of damage is large, the case can shift from ordinary fraud to prosecution under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, which carries substantially harsher minimum sentences. This page walks through how that distinction is drawn and what a defense strategy typically looks like at each stage.
Fraud Defense | Whether you had intent to deceive at the time of the act
Fraud is not established simply because a promise was broken or money was not repaid. The core legal question is whether, at the moment you received the money or benefit, you already knew you would not or could not fulfill your side of the deal.
What 'intent to deceive' actually means
Under 형법 제347조, fraud requires that the deception was made with awareness that the statement was false and that the victim would rely on it to hand over property. Prosecutors typically try to prove this through timing evidence — for example, whether you already knew your business was insolvent when you borrowed the money, or whether you had no realistic ability to deliver goods you had already sold.
Circumstantial evidence investigators rely on
Because intent is a state of mind, it is almost always proven indirectly: bank records showing your financial condition before the transaction, whether you used the money for its stated purpose, whether you disclosed known risks to the other party, and your conduct after the deal fell through (did you attempt partial repayment or explanation, or did you disappear).
Building a defense around absence of intent
A common and often effective defense is to reconstruct the timeline to show that the failure was caused by a later, unforeseeable event — a client's own default, a market downturn, or an unexpected business failure — rather than a plan formed from the outset. Contemporaneous documents (contracts, messages, accounting records) from before the deal fell apart are usually more persuasive than after-the-fact explanations.
Fraud Defense | Where the line between a civil debt dispute and a crime is drawn
Complainants frequently file a criminal fraud report as a way to pressure a debtor into repayment, even where the underlying dispute is purely about an unpaid loan or a failed contract. Recognizing which category your case falls into shapes the entire defense.
Simple non-payment is not automatically a crime
Failing to repay a loan, missing a delivery date, or a business going bankrupt does not by itself satisfy the elements of 형법 제347조. Korean courts have consistently required proof that the deception and the intent predated the transaction, not that the outcome was simply unfavorable to the other party.
Signs a case is more likely to be treated as criminal
Investigators tend to view a case as fraud rather than a civil matter when there is a pattern of borrowing from multiple victims around the same time while insolvent, use of a fabricated identity or false collateral, or clear evidence the funds were diverted for a purpose unrelated to what was represented.
Why this distinction matters for you
If your case is genuinely a civil dispute, the appropriate venue is a civil suit for the debt, not a criminal complaint — and this can be a central argument at the investigation stage, potentially leading to a non-indictment decision rather than moving forward to trial.
Fraud Defense | When the Specific Economic Crimes Act applies and why it matters
The amount of financial damage involved is not just a factor in sentencing — once it crosses certain thresholds, an entirely different, harsher statute applies instead of ordinary fraud.
The threshold that changes everything
Under 특정경제범죄 가중처벌 등에 관한 법률 제3조, if the amount of property obtained through fraud is 500 million won or more, the case is prosecuted under this Act rather than the plain fraud provision, and the statute sets a mandatory minimum sentence of at least 3 years' imprisonment; if the amount is 5 billion won or more, the minimum rises to at least 5 years.
Why the calculation of the amount itself becomes contested
Because crossing the 500 million or 5 billion won line changes the applicable law and sentencing floor, disputing how the total damage amount was calculated — for example, whether multiple victims' losses should be aggregated as a single continuing offense or treated as separate counts — becomes a critical part of the defense.
Practical consequences of SEC Act cases
Cases under this Act are generally treated more seriously at every stage: bail and pretrial detention are less likely to be granted, and because of the mandatory minimum, a suspended sentence becomes harder to obtain even where restitution has been made. This makes early-stage strategy — including voluntary restitution and settlement with the victim — especially important before indictment.
Fraud Defense | From complaint to resolution
Once a fraud complaint (고소장) is filed, you may be summoned as a suspect. What you say in this first interview, and what documents you bring, often shapes the case more than anything that follows.
The police forward the case with an opinion, and the prosecutor decides whether to indict, dismiss, or send it back for further investigation. This is often the best point to submit evidence disproving intent to deceive or arguing the matter is civil in nature.
In larger cases, especially those nearing the Specific Economic Crimes Act thresholds, prosecutors may seek an arrest warrant. A separate hearing addresses whether detention is necessary pending trial.
If indicted, the case proceeds to trial where intent, the civil/criminal distinction, and the calculation of damages are argued. Restitution to the victim and a written statement of no objection to punishment (합의서) can materially affect sentencing even after indictment.
If convicted, sentencing considers the amount of damage, whether restitution occurred, and prior record. Either side may appeal within the statutory period if they disagree with the outcome.
Fraud Defense | How fees are typically calculated
Generally set based on the stage of the case (police investigation only, versus prosecutor's office, versus trial) and the complexity of tracing financial transactions and reconstructing timelines relevant to intent.
Where applicable, tied to concrete outcomes such as a non-indictment decision, a reduction from an SEC Act charge to ordinary fraud, or a suspended sentence — not to a guaranteed result.
Includes costs for obtaining transaction records, expert review of accounting documents where relevant, and any costs related to negotiating restitution or settlement with the victim.
If the case proceeds from investigation to trial, or from trial to appeal, fees are usually structured in separate stages rather than a single flat amount covering everything from the outset.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
Fraud Defense | Self-Check Before You Consult
1️⃣ If You Are Under Investigation as a Suspect
- Did you already know, at the time you received the money, that you would not be able to repay or deliver as promised?
- Do you have contemporaneous records (contracts, messages, bank statements) from before the deal fell through?
- Have you been summoned by police or prosecutors, and if so, on what date?
- Did you use the funds for the purpose you represented to the other party?
2️⃣ If You Received a Complaint Notice or Warrant Request
- Does the complaint amount approach or exceed 500 million won, potentially triggering the Specific Economic Crimes Act?
- Have you had any contact with the complainant about repayment or settlement since the dispute arose?
- Is there a realistic possibility of making partial or full restitution before indictment?
- Do multiple people appear to be filing similar complaints against you around the same period?
3️⃣ Distinguishing a Civil Debt From a Criminal Case
- Was there a legitimate, documented business or personal reason the deal failed, unrelated to any plan formed beforehand?
- Have you already been sued civilly for the same money, and how does that differ from the criminal complaint?
- Can you show the failure arose from a later event (market conditions, a third party's default) rather than from the outset?
