Supreme Court: Fraud Committed by Spouses in the Same Scheme Constitutes a Single Crime

"If the combined damage of a couple exceeds 500 million won, the Special Criminal Act applies"

The Supreme Court has ruled that fraud crimes committed against a married couple by the same perpetrator with a single criminal intent should be regarded as one crime.

The issue was whether to apply fraud charges under the Criminal Act or under the special law, the Act on the Aggravated Punishment of Specific Economic Crimes. The Supreme Court ruled that if the combined amount of damage suffered by the couple exceeds 500 million won, the Act on the Aggravated Punishment of Specific Economic Crimes can be applied.

Supreme Court, Seocho-dong, Seoul.

According to the legal community on the 18th, the Supreme Court's 2nd Division (Presiding Justice Kwon Young-jun) upheld the original sentence of two years imprisonment for real estate developer Mr. A, who was indicted on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, fraud under the Criminal Act, and violation of the Road Traffic Act (driving without a license).

The court stated the reason for dismissing the appeal was that "there was no error in the lower court's judgment by failing to conduct necessary hearings, violating the rules of logic and experience, exceeding the limits of free evaluation of evidence, or misunderstanding the law regarding a single comprehensive crime."

Mr. A was indicted on charges of deceiving a married couple victims between 2010 and 2011 by saying, "I will buy forest land in Okcheon-myeon, Yangpyeong-gun, subdivide it, and pay the principal plus profit calculated per pyeong. If the subdivision does not proceed, I will transfer the real estate title," and receiving 475 million won from one spouse and 100 million won from the other.

He also embezzled 40 million won, 220 million won, and 135 million won from other victims using similar methods, and was charged with driving without a license in February 2022.

The key issue in the trial was whether the fraud charge under the Act on the Aggravated Punishment of Specific Economic Crimes, which carries heavier penalties when the victim is a married couple, could be applied. While the statutory penalty for fraud under the Criminal Act is "imprisonment up to 10 years or a fine up to 20 million won," the penalty under the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) depends on the value of the property or economic benefits obtained through the crime, with penalties of "imprisonment of 3 years or more" (for gains between 500 million and less than 5 billion won) or "life imprisonment or imprisonment of 5 years or more" (for gains of 5 billion won or more), which are much heavier.

The first trial court found all charges against Mr. A guilty, sentencing him to 5 years and 2 months imprisonment for fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, and 4 months imprisonment for other fraud and Road Traffic Act violations, totaling 5 years and 6 months imprisonment.

During the trial, Mr. A's defense argued, "According to the principle of separate calculation for spouses, the legal interests of the victims are independent, so the charges constitute separate fraud crimes against each victim, not a single comprehensive crime but two separate crimes (substantive concurrence)." They claimed that the special law should not be applied based on the combined damage amount of 575 million won suffered by the couple, but rather fraud charges under the Criminal Act should be applied individually.

However, the court did not accept this argument.

The court concluded, "Although the defendant and the victim couple each signed contracts in their own names, creating two contracts, and transferred the embezzled amounts from their respective accounts, the facts and circumstances from the evidence show that the defendant received investment funds centered on the land area from the couple, and the single intent and continuity of the embezzlement are recognized. The legal interests of the victims are the same, so the fraud against the victim couple constitutes a single comprehensive crime."

The court based this judgment on the following: ▲ The victim couple testified that the husband ran a business and the wife took care of household duties, living as a married couple and building assets together ▲ They lived together and decided to sell jointly owned property, a building, to raise investment funds to give to the defendant ▲ They testified that their reason for investing was to increase their joint assets for their retirement ▲ Both were present when signing the contracts and received explanations about the investment from the defendant together, suggesting the defendant intended to deceive both simultaneously and embezzle money ▲ After meeting the defendant, the couple discussed and decided on the investment together ▲ The money the wife transferred to the defendant was previously deposited by the husband to the wife, and the financial transaction records show the wife did not hold financial assets independently of the husband ▲ The wife transferred the money to the defendant at the husband's instruction.

The second trial court held the same view.

The second trial court also ruled that the fraud against the victim couple should be regarded as a single comprehensive crime.

However, the court accepted Mr. A's claim of excessive sentencing, considering ▲ Mr. A admitted most of the crimes and showed remorse in the second trial court ▲ Mr. A committed the crimes due to financial difficulties during the land development project ▲ The victim couple expressed they did not want punishment ▲ Partial restitution was made to some victims. The court overturned the first trial's sentence for the Act on the Aggravated Punishment of Specific Economic Crimes violation and sentenced Mr. A to 1 year and 6 months imprisonment, maintaining the 4-month sentence for other charges.

The Supreme Court's ruling was the same.

The court stated, "Considering the commonality of the deceptive acts, the circumstances leading to the deception, the commonality of decision-making regarding the transfer of property, the process of forming and maintaining the property, the purpose and method of property transfer, and the circumstances after the deception, the legal interests of the victims in the fraud charges can be regarded as identical, so the fraud charges constitute a single comprehensive crime."

The court added, "The fact that the defendant prepared contracts separately for each victim or that the victims transferred money from their own accounts separately does not contradict or conflict with the conclusion that the fraud charges against the victims constitute a single comprehensive crime, as these circumstances are compatible with the identity of the legal interests."