Illegal Deposit-Taking Lawyer
Illegal Deposit-Taking Lawyer | Building a defense around what actually counts as "deposit-taking"
Illegal deposit-taking (유사수신행위) is regulated separately from fraud: it criminalizes soliciting funds from an unspecified number of people while promising repayment of principal plus a return, without authorization to take deposits (유사수신행위의 규제에 관한 법률 제2조, 제3조). The maximum penalty is 5 years' imprisonment or a fine of up to 50 million won (동법 제6조 제1항). Because the statute focuses on the structure of the solicitation rather than on whether the money was ever going to be repaid, cases often turn on whether the arrangement legally qualifies as "deposit-taking" at all — and separately, on whether it should instead (or also) be charged as fraud, which carries a materially different framework and, above certain amounts, exposure under the Act on the Aggravated Punishment of Specific Economic Crimes.
Illegal Deposit-Taking | What the prosecution actually has to prove
The offense has a narrow, technical definition. Whether your case fits it is frequently the first and most winnable battleground.
'Unspecified number of persons'
The statute is aimed at soliciting funds from the general public, not from a closed, pre-existing group (유사수신행위의 규제에 관한 법률 제2조). If investors were a small, defined circle of friends, family, or existing business partners who approached you rather than the other way around, the 'unspecified persons' element can be contested.
Promise to repay principal plus a fixed return
The core conduct is promising that all or most of the principal will be repaid along with a return exceeding what a deposit-taking institution offers (동법 제2조 제1호부터 제4호). If the arrangement was structured as an equity investment, a profit-sharing partnership, or a loan with no guaranteed repayment of principal, that framing matters for whether the element is met.
No authorization under other financial statutes
The prohibition targets funds solicited without any license or registration under banking, mutual savings, or similar financial regulation laws (동법 제3조). If your business held some form of registration relevant to the activity, that registration's actual scope becomes a factual issue worth examining closely.
Illegal Deposit-Taking | Where illegal deposit-taking ends and fraud begins
Prosecutors frequently charge illegal deposit-taking together with, or as an alternative to, fraud (형법 제347조). The two offenses protect different interests and require different proof.
Deceptive intent is the dividing line
Illegal deposit-taking does not require proof that you intended to deceive investors or never intended to repay; it punishes the structure of the solicitation itself. Fraud, by contrast, requires proof of deceptive intent at the time funds were received and resulting damage to the victim (형법 제347조 제1항). Whether prosecutors can show you knew repayment was impossible when you took the money is often the crux of the case.
Business viability evidence matters for the fraud charge
For the fraud charge specifically, records showing the business had a real revenue model, that early investors were in fact repaid from operating income rather than purely from new investor funds, and that the business only failed later due to market or operational reasons, can support an argument that deceptive intent is not established beyond reasonable doubt.
A finding on one charge does not decide the other
Even if the deposit-taking structure element is conceded or established, that alone does not prove fraudulent intent, and vice versa. Each charge requires the prosecution to independently satisfy its own elements, which is why the two are argued separately even when charged together.
Illegal Deposit-Taking | When the amount of damage escalates sentencing exposure
If the case is prosecuted as fraud (or breach of trust/embezzlement) and the aggregate amount taken from victims crosses certain thresholds, the Act on the Aggravated Punishment of Specific Economic Crimes applies mandatory minimum sentencing, not the ordinary Criminal Code range.
The two statutory brackets
Under the Act, if the total amount gained exceeds 500 million won, the minimum sentence is 3 years' imprisonment; if it exceeds 5 billion won, the minimum rises to 5 years, and both brackets allow imprisonment up to life (특정경제범죄 가중처벌 등에 관한 법률 제3조 제1항). This removes the possibility of a suspended sentence in many cases unless the amount calculation itself can be challenged.
How 'amount' is calculated is contestable
The relevant amount is usually the aggregate sum received from all victims treated as part of a single scheme, not the amount any one investor lost after partial repayment. Whether multiple solicitations should be aggregated as one continuing offense or treated separately, and whether amounts already repaid should reduce the calculated figure, are frequently litigated points that directly affect which sentencing bracket applies.
Staying below the threshold changes the entire framework
If the amount can reasonably be shown to fall under 500 million won, or if part of the conduct is better characterized as illegal deposit-taking alone rather than fraud, the case may remain outside the Special Economic Crimes Act altogether, which materially changes sentencing exposure and the realistic range of outcomes.
⚠ Mandatory minimums leave little room once the threshold is crossed
Once a court finds the amount exceeds 500 million won under the Special Economic Crimes Act, the statutory minimum of 3 years applies regardless of mitigating personal circumstances, unless a lesser included offense or reduced amount finding changes the framework (특정경제범죄 가중처벌 등에 관한 법률 제3조 제1항).
Illegal Deposit-Taking | Practical directions a defense can take
Because illegal deposit-taking and fraud charges rest on different elements, the available defenses differ depending on which charge — or combination — is actually filed.
Restitution and settlement with investors
Actively repaying investors or reaching individual settlements does not erase the elements of illegal deposit-taking, since it is not classified as a crime that requires a victim's complaint to prosecute, but restitution is routinely considered in sentencing and can support a request for a suspended sentence or reduced punishment where the statutory minimum does not apply.
Challenging aggregation of multiple solicitations
When investigators combine numerous separate fundraising rounds into a single aggregate figure for Special Economic Crimes Act purposes, examining whether each round had a genuinely distinct structure, timing, or investor pool can be a basis to argue against treating them as one continuous offense.
Distinguishing your role in a larger scheme
In multi-person schemes, whether you were an organizer, a mid-level recruiter, or someone who invested and later brought in acquaintances affects both which elements apply to you and how sentencing factors are weighed. Clarifying your actual role and the extent of proceeds you personally received is often central to the case.
Illegal Deposit-Taking | From investigation to trial
Reviewing the investigation record, the specific charge (illegal deposit-taking, fraud, or both), and the amount calculation prosecutors are relying on.
Preparing for questioning, organizing financial records and communications with investors, and where relevant, initiating voluntary restitution or settlement discussions before indictment.
Prosecutors decide whether to indict, and if so, under which statute(s); this is often when the Special Economic Crimes Act threshold determination becomes concrete based on the calculated aggregate amount.
Contesting statutory elements (unspecified persons, promised repayment, deceptive intent), the amount calculation, and gathering evidence of restitution or business legitimacy for sentencing purposes.
Arguing the applicable legal framework and, where the statutory minimum applies, focusing on factors that can support the lower end of the range or a reduced amount finding.
Illegal Deposit-Taking | How fees are typically set
Generally set according to the stage of proceedings (investigation stage vs. after indictment), the complexity of the financial evidence, and whether the case involves the Special Economic Crimes Act threshold analysis.
If used, tied to concrete outcomes such as a non-indictment decision, a reduced charge, or a suspended sentence — never framed as a guarantee of any particular result.
Costs such as forensic accounting review of investor funds, expert opinions on the amount calculation, or document translation where relevant.
Where restitution to investors is part of the defense strategy, this is a separate financial commitment from legal fees and is discussed and planned independently.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
Illegal Deposit-Taking | Self-Check for Illegal Deposit-Taking Cases
1️⃣ Was this solicitation actually 'illegal deposit-taking'?
- Were funds solicited from an unspecified number of the general public, or from a small, pre-existing closed group?
- Did you promise repayment of all or most of the principal plus a fixed return, or was it structured as equity/profit-sharing with no guaranteed principal?
- Did you or your business hold any registration or license under a related financial statute?
2️⃣ Is a fraud charge also on the table?
- Do investigators allege you knew repayment was impossible at the time you took the funds?
- Were early investors actually repaid from real business income, or only from newly collected investor funds?
- Is there documentation showing a genuine business operation and revenue model?
3️⃣ Does the Special Economic Crimes Act apply?
- What aggregate amount are prosecutors using, and across how many separate fundraising rounds?
- Have any amounts already been repaid been subtracted from the calculated figure?
- Does the total realistically fall above or below the 500 million won / 5 billion won thresholds?
4️⃣ What is your actual role in the scheme?
- Were you an organizer, a recruiter, or primarily an investor who introduced others?
- How much of the total proceeds did you personally receive or retain?
- Have you already taken steps toward restitution or settlement with any investors?
