Crimes of Fraud

Home > Sentencing Guidelines > Crimes of Fraud
Promulgated on March 21, 2011, Effective on July 1, 2011


  1. 1. GENERAL FRAUD
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Type Classification Mitigated
Sentencing Range
Standard
Sentencing Range
Aggravated
Sentencing Range
1 Less Than 100 Million Won - 1yr 6months
- 1yr 6months
1yr - 2yrs 6months
2 More Than100 Million Won,
But Less Than 500 Million
Won
10months
- 2yrs 6months
1yr - 4yrs 2yrs 6months
- 6yrs
3 More Than 500 Million Won,
But Less Than 5 Billion Won
1yr 6months - 4yrs 3yrs - 6yrs 4yrs - 7yrs
4 More Than 5 Billion Won, But
Less Than 30 Billion Won
3yrs - 6yrs 5yrs - 8yrs 6yrs - 9yrs
5 More Than 30 Billion Won 5yrs - 9yrs 6yrs - 10yrs 8yrs - 13yrs
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Classification Mitigating Factor Aggravating Factor
Special
Sentencing
Determinant
Conduct
  • Fraud by Willful Negligence or
    Fraud with Only Slight Degree of
    Deception
  • Offense Caused Relatively Small
    Actualized Damages
  • Passive Participation Resulting
    From Outside Pressure
  • Cases where the Victim is Also
    Primarily Responsible for the Crime
    or Extent of the Damage
  • Crime Against Unspecified
    Multiples of Victims or Prolonged
    and Repeated Commission of the
    Crime
  • Inflicting Serious Harm to the Victim
  • Particularly Malicious Commission
    of the Offense or Offense of Fraud
    in Lawsuits by Committing
    Deception in Court
  • Deliberate Concealing of Profits
    Made from the Offense
  • Instigating the Subordinate Person
    to Commit the Offense
Actor/etc.
  • Those with Hearing and Visual
    Impairments
  • Those with Mental Incapacity
    (Cases Where the Offender Cannot
    be Held Liable)
  • Voluntary Surrender to Investigative
    Agencies or Whistle-blowing
  • Offender Expresses Remorse and
    the Victim Opposes Punishment or
    Substantial Portion of Harm
    Reversed
  • Habitual Offenders
  • Repeated Offenses of Same Type
    under the Criminal Act
General
Sentencing
Determinant
Conduct
  • Offense Committed for Basic Living
    Expenses, Hospital Expenses and
    the Like
  • Cases Where the Offender Failed
    to Consume or Retain Most of the
    Profit from the Crime
  • Passive Participation
  • Condemnable Motives
  • Vulnerable Victims
  • Abuse of Relationship of Trust
Actor/etc.
  • Those with Mental Incapacity
    (Cases Where the Offender Cannot
    be Held Liable)
  • Expresses Sincere Remorse
  • No Prior Criminal History
  • Genuine Efforts to Reverse Harm
  • Destroying Evidence or Attempting
    to Conceal Evidence After
    Commission of the Offense
  • Repeated Offenses of Different
    Type under the Criminal Act,
    Criminal History of Imprisonment by
    the Same Type of Offenses, and
    Embezzlement or Breach of Trust
    that Does Not Constitute Repeated
    Offense under the Criminal Act
    (This Applies When the Criminal
    History is Within Ten Years After
    Completion of Sentence)
  1. 2. ORGANIZATIONAL FRAUD
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Type Classification Mitigated
Sentencing Range
Standard
Sentencing Range
Aggravated
Sentencing Range
1 Less Than 100 Million Won 1yr - 2yrs 6months 1yr 6months - 3yrs 2yrs 6months
- 4yrs
2 Mors Than 100 Million Won,
But Less Than 500 Million
Won
1yr 6months - 3yrs 2yrs - 5yrs 4yrs - 7yrs
3 More Than 500 Million Won,
But Less Than 5 Billion Won
2yrs - 5yrs 4yrs - 7yrs 6yrs - 9yrs
4 More Than 5 Billion Won, But
Less Than 30 Billion Won
4yrs - 7yrs 6yrs - 9yrs 8yrs - 11yrs
5 More Than 30 Billion Won 6yrs - 10yrs 8yrs - 13yrs More Than 11yrs
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Classification Mitigating Factor Aggravating Factor
Special
Sentencing
Determinant
Conduct
  • Cases with Only Slight Degree of
    Deception
  • Offense Caused Relatively Small
    Actualized Damages
  • Passive Participation Resulting
    From Outside Pressure or Other
    Similar Circumstances
  • Mere Participation
  • Cases where the Victim is Also
    Primarily Responsible for the Crime
    or Extent of the Damage
  • Active Lead Role in Planning and
    Orchestrating the Commission of
    the Offense
  • Crime Against Unspecified
    Multiples of Victims or Prolonged
    and Repeated Commission of the
    Crime
  • Inflicting Serious Harm to the Victim
  • Deliberate Concealing of Profits
    Made from the Offense
  • Instigating the Subordinate Person
    to Commit the Offense
Actor/etc.
  • Those with Hearing and Visual
    Impairments
  • Those with Mental Incapacity
    (Cases Where the Offender Cannot
    be Held Liable)
  • Voluntary Surrender to Investigative
    Agencies, Whistle-blowing, or
    Voluntary Full-Disclosure of Crime
  • Offender Expresses Remorse and
    the Victim Opposes Punishment or
    Substantial Portion of Harm
    Reversed
  • Habitual Offenders
  • Repeated Offenses of Same Type
    under the Criminal Act
General
Sentencing
Determinant
Conduct
  • Offense Committed for Basic Living
    Expenses, Hospital Expenses and
    the Like
  • Cases Where the Offender Failed
    to Consume or Retain Most of the
    Profit from the Crime
  • Passive Participation
  • Condemnable Motives
  • Vulnerable Victims
  • Abuse of Relationship of Trust
Actor/etc.
  • Those with Mental Incapacity
    (Cases Where the Offender Cannot
    be Held Liable)
  • Expresses Sincere Remorse
  • No Prior Criminal History
  • Genuine Efforts to Reverse Harm
  • Destroying Evidence or Attempting
    to Conceal Evidence After
    Commission of the Offense
  • Repeated Offenses of Different
    Type under the Criminal Act,
    Criminal History of Imprisonment by
    the Same Type of Offenses, and
    Embezzlement or Breach of Trust
    that Does Not Constitute Repeated
    Offense under the Criminal Act
    (This Applies When the Criminal
    History is Within Ten Years After
    Completion of Sentence)
  1. 1. GENERAL FRAUD
    • TYPE 1 : This means where the amount of profit involved does not exceed 100 million won. “Profit” means the offender or the third party through the assistance of the offender has acquired property or financial gain by the commission of the offense
      (This definition applies throughout the guideline).
    • TYPE 2 : This means cases where the amount of a profit involved exceeds 100 million won but is less than 500 million won.
    • TYPE 3 : This means cases where the amount of a profit involved exceeds 500 million won but is less than 5 billion won.
    • TYPE 4 : This means cases where the amount of a profit involved exceeds 5 billion won but is less than 30 billion won.
    • TYPE 5 : This means cases where the amount of a profit involved exceeds 30 billion won.
  2. 2. ORGANIZATIONAL FRAUD
    • This means cases where multiple offenders engage in commission of the offense in an organized scheme involving agreeing to the crime in advance, allocating and professionally executing the commission (for example, telemarketing fraud by a fraudulent telemarketing organizations, gambling fraud by a fraudulent gambling organizations, insurance fraud by a fraudulent insurance organizations, real estate fraud by fraudulent real estate organizations, organizational government subsidy crimes, fraud in the form of multi-level marketing organization by the major participant of the organization or execution would all fall within the definition)
    • The definition for Type 1 or 5 is identical to that of the definition under General Frauds.
  1. 1. SLIGHT DEGREE OF DECEPTION INVOLVED
    • This means cases where one or more following factors apply:
      • Deception by omission of acts (Cases where the fraudulent behavior did not exist in the beginning of the transaction in question but occurred only in the later stages. This includes cases where the offender continued to take financial assistance without notifying the termination of such rights, cases where the offender underwent monetary transactions without informing the financial difficulties in the course of such ongoing transaction, cases where the offender violated the duty to notify insurance companies with certain facts or other similar cases);
      • Cases involving passive fraudulent behavior (For example, cases where the offender committed fraud by going along with the victim’s misrepresentations and other similar circumstances);
      • Cases where the defrauded matter is not a significant part of a legal act;
      • Cases where the extent of fraudulent behavior is slight in that it does not fall within the actual matters of fact; or
      • Other cases with comparable factors.
  2. 2. OFFENSE CAUSED RELATIVELY SMALL ACTUALIZED DAMAGES
    • This means cases where less than 1/3 of the potential damage actualized through the offense.
  3. 3. CASES WHERE THE VICTIM IS ALSO PRIMARILY RESPONSIBLE FOR THE CRIME OR EXTENT OF THE DAMAGE
    • This means cases where one or more following factors apply:
      • Cases where the victim believed in a fraudulent act that goes against common sense to gain undue benefit or make large profits in a short period of time;
      • Cases where the victim was aware of the illegal funds in operation but sought to make investment with substantial profit for return;
      • Cases where the victim’s intent or motive for gaining illegal profit caused or facilitated the crime;
      • Cases with other comparable factors.
  4. 4. INFLICTING SERIOUS HARM TO THE VICTIM
    • This means cases where one or more following factors apply:
      • Financial or management crisis of the company as a result of the offense;
      • Collapse of company’s stocks due to damaged reputation as a result of the offense;
      • Multiple bankruptcies induced as a result of the offense;
      • Victims suffers from losses of nearly all assets due to the offense; or
      • Other cases with comparable factors.
  5. 5. PARTICULARLY MALICIOUS COMMISSION OF THE OFFENSE
    • This means cases where one or more following factors apply:
      • Means and methods for the commission of the offense was meticulously done in-advance;
      • The use of scope of employment as professionals involved in business such as finance, stock markets, trading, accounting;
      • Actively employing methods such as falsifying accounts, forging documents used in the commission of the offense;
      • Using highly intelligent schemes to commit the offense;
      • Using new professional schemes previously unknown; or
      • Other cases with comparable factors.

    Crime of fraud accompanied by forgery, and the like of documents are not be considered as multi-count convictions, but the crimes concerning the documents shall be considered as a factor for adjusting sentencing range.

  6. 6. DELIBERATE CONCEALMENT OF PROFITS GAINED FROM THE OFFENSE
    • This means profits gained from the offense was deliberately concealed by the offender thereby causing delayed damage recovery or absence of recovery.
  7. 7. CASES OF WHISTLE-BLOWING OF CORRUPTION
    • This means the investigation was initiated with a voluntary report by a former participant of a structural corruption with the intent to end the offense.
  8. 8. SUBSTANTIAL PORTION OF DAMAGE REVERSED
    • This means more than 2/3 of the caused damage has been reversed or will be reversed with certainty.
  9. 9. CONDEMNABLE MOTIVES
    • This means cases with one or more of the following factors:
      • Offense committed for the purpose of using the profit in illegal activities such as gambling;
      • Offense committed for the purpose of preparing funds to commit another crime;
      • Offense committed for the purpose of taking revenge or assaulting the victim by obtaining the victim’s property by fraud;
      • Offense committed for the purpose of prevailing over other criminal organizations by obtaining the victim’s property by fraud ; or
      • Other cases with comparable factors.
  10. 10. MERE PARTICIPATION
    • This means cases where the offender did not lead, plan, or command the organized fraud in its entirety or partially, but participated in a mere conduct during the execution phase of the offense.
  1. 1. DETERMINING APPROPRIATE SENTENCING RANGE
    • In determining the appropriate sentencing range, the judge must only consider the special sentencing determinants.
    • However, in cases involving more than two special sentencing determinant, the applicable sentencing range is adjusted after assessing the factors as set forth below:
      1. ① The same number of conduct factor shall be considered with greater significance than the actor/etc. factor. However, this shall be assessed equally to the victim’s objection to the punishment.
      2. ② Each factor within the relevant categories of conduct or actor/etc. factors should be treated as equal.
      3. ③ If the applicable sentencing range is unable to be determined by the aforementioned principles ①, ②, the judge is to decide the applicable sentencing range through a comprehensive comparison and assessment based on the principles set forth in ①, ②.
    • It is recommended that when the assessment reveals greater aggravating factors to select the aggravated zone, the mitigating factors is greater to select the mitigating zone, and the same number of aggravating factors and mitigating factors to select the standard zone as a sentencing range.
  2. 2. DETERMINING THE APPLICABLE SENTENCE
    • The judge should select the proper point within the sentencing range as assessed in accordance with the above principles, along with the special sentencing determinant and general sentencing determinant taken together.
    • When the maximum of the sentencing range exceeds twenty-five years, the judge may impose a life imprisonment.
  1. 1. SPECIAL ADJUSTMENTS TO THE SENTENCING RANGE
      1. ① In cases where the aggravating factor is selected and the assessment of the special sentencing determinant reveals only two or more special aggravating factors or the special sentencing determinant outnumbers the special mitigating determinant by two or more, then the sentencing range should be increased up to 1/2 from the maximum level.
      2. ② For cases where the mitigating factor is selected as a result of assessment of the special sentencing determinant, and there are two or more special mitigating determinant or the special mitigating determinant outnumbers the special aggravating determinant by two or more, the sentencing range should be decreased up to 1/2 from the minimum level.
  2. 2. RELATION BETWEEN THE RECOMMENDED SENTENCING RANGE GUIDELINES AND APPLICABLE SENTENCING RANGE BY LAW
    • When the sentencing range under this guideline conflicts with the range drawn in accordance with the aggravation and mitigation of applicable law, the sentencing range prescribed by applicable law governs.
  3. 3. APPLICATION OF STATUTORY MITIGATING FACTORS AS DISCRETIONARY
    • When the judge declines to apply the optional mitigation factor under the applicable law as listed in the sentencing table of this guideline, this shall be considered as the discretion for mitigation.
  1. 1. APPLICABLE SCOPE
    • This part on multi-count convictions applies to concurrent crimes prescribed in the first part of Article 37 of the Criminal Act as set forth in this sentencing guideline. However, in cases of this article’s concurrent crimes where offenses that fall within and outside of the sentencing guidelines are involved, the minimum level should be the minimum of the sentencing range of the offense that is set forth in this sentencing guideline.
  2. 2. DETERMINING BASE OFFENSE
    • The “base offense” means the most severe offense that results after the selection of penalty and statutory aggravation and mitigation as prescribed in Criminal Act, Article 50. However, in cases where the maximum sentencing range is lower than that of the maximum sentencing range of the other counts as provided in this guideline, then such other count becomes the base offense.
  3. 3. CALCULATING SENTENCING RANGE OF MULTI-COUNT CONVICTION
    OF THE SAME OFFENSE
    • For purposes of calculating sentencing range for multi-count conviction cases with the same offenses of general fraud or offenses of organizational fraud, the judge shall apply the following principles:
      1. ① In setting sentencing range, take into account the total amount of profit from the fraud, and select the appropriate sentencing range by considering all relevant factors.
      2. ② However, as a result of total summation, if the applicable offense type is one level higher than the most severe single offense among the multi-count, then reduction of 1/3 is made to the minimum sentencing range. If the applicable offense type is two or more levels higher than the most severe single offense among the multi-count, then reduction of 1/2 is made to the minimum sentencing range by applying the minimum sentencing range of the most severe single offense among the multi-count.
    • For multi-count convictions of different type of offenses involving multi-count conviction of general fraud and organizational fraud, apply the following principles for calculation.

    In cases where the general and the organizational fraud constitute a single offense of habitual fraud, select either the general or the organizational fraud after taking relevant factors into account, then select the principle of multi-count conviction of the same type of offense.

  4. 4. CALCULATING SENTENCING RANGE OF MULTI-COUNT CONVICTION
    OF DIFFERENT OFFENSES
    • For purposes of calculating sentencing range for multi-count conviction cases with the different offense, the judge shall apply the following principles unless the offenses are deemed as a single offense under the sentencing guideline:
      1. ① In setting sentencing range for an offender convicted of two counts, the sentencing range should be the total sum of the maximum sentencing range of the base offense and the 1/2 of the maximum sentencing range of the second count.
      2. ② In setting sentencing range for an offender convicted of three or more counts, the sentencing range should be the total sum of the following: (1) maximum sentencing range of the base offense, (2) 1/2 of the maximum sentencing range of the count with the highest sentencing range, and (3) 1/3 of the maximum sentencing range of the remaining count with the second highest sentencing range.
      3. ③ For cases where the minimum sentencing range of the other count is higher than that of the base offense, the minimum sentencing range resulting from the multi-count offense should be the minimum sentencing range of the other count.
    • However, when the multi-count conviction of fraud includes the same offenses of general fraud or offenses of organizational fraud, first set the sentencing range for multi-count conviction of the same offense and then use the resulted point range to calculate the sentencing range for multi-count conviction with different offenses.

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