본문 바로 가기 주메뉴 바로가기

Protecting Freedom, Democracy, Law and Public Order

HOME > Prosecutors > Activities > News Brief

News Brief

News Brief Board .
Title Supreme Prosecutors’ Office to Return Criminal Proceeds to Victims for the First Time in Korean History
Write date 2016. 11. 25. Click Count 394
Email spbin79@spo.go.kr
Content Supreme Prosecutors’ Office to Return Criminal Proceeds to Victims for the First Time in Korean History
– 700 Million Won to be returned to 1,800 Victims –
 
Kwon Soonchul, Chief of the International Cooperation Center, Supreme Prosecutors’ Office(SPO), announced on NOV 8ththat the SPO has decided to return approximately 700 million Won of criminal proceeds to 1,800 victims. The recovered proceeds were acquired by selling property forfeited in California, USA, which was purchased with money obtained through a massive pyramid fraud scheme masterminded by a T. Kwak(full name not revealed due to privacy considerations). It is the first time in history that the Korean government is distributing criminal proceeds to victims, whether recovered in Korea or overseas. The proceeds will be returned to the victims of Kwak’s pyramid fraud scheme.
 
The SPO organized a temporary “Restoration Support Task Force” comprising 15 investigators and prosecutors, and is planning to notice the 1,200 known victims as well as publish a public notice on the official gazette. The SPO will receive petitions for one month until December 8thand plans to return the money to the victims by the first half of next year.
 
Kwak was sentenced in 2010 to 8 years in prison for his pyramid scheme. In one of his crimes, he defrauded the victims by selling them shares of his fraudulent investment companies, such as “FX Institute Investments”, telling them they will earn a fortune when he lists the companies on the stock market. The total amount of money he defrauded is estimated to be about 258 billion Won, with the total number of victims estimated at 10,000. Kwak was also sentenced to 1 year in prison in 2012 for laundering his proceeds from the pyramid fraud by buying the property in California. Upon SPO’s request, the HSI Los Angeles branch froze the property in December 2011, and the US attorney’s office for the Central District of California filed for a civil forfeiture. The forfeited property was sold at 965,000 USD in 2013.
 
Compared to the forfeiture process, which went smoothly thanks to the close cooperation between the law enforcement offices of Korea and the U.S., actually recovering the forfeited proceeds to the victims in Korea was delayed for over three years due to a blind spot in Korean law, which lacks a provision allowing the government to distribute fraud proceeds to victims. Because of this problem, the task is being carried out based on the American remission of forfeiture process, instead of Korean law. The United States Department of Justice decided September 1stthis year that it would transfer the 670,000 USD to Korea upon completion of the remission process.
 
This victim restoration case is especially meaningful in that, unlike past international asset recovery cases which focused on the restoration of government coffers, this case focuses on compensating the victims.
 
This case also demonstrates the need for revising the current asset recovery laws. In this case, it took much longer to actually return the assets to Korea(Over 3 years and 4 months), than it took to forfeit the illegal asset(1 year and 6 months), due to legal gaps in current Korean law. “If there were a code in the law allowing the government to distribute fraud proceeds to victims, it would be much easier to stop the perpetrator from hiding the assets in the early stages of an investigation. It would change the investigation process as well, because it would encourage the prosecution to identify the victims quickly by seizing contracts and ledgers early in the stages of search and seizure,” explained a prosecutor at the SPO in an interview.
News Brief 게시판의 이전/다음글 입니다.
다음글 Investigation Report on the JO Hee Pal Pyramid Fraud Case and Related Corruption Suspicions[2016. 7. 12.]
go to list