‘Daepotongjang’ Gambling Funds Embezzlement Punishable

Account Holder Who Embezzled Deposited Funds
Crackdown on So-Called 'Nureugi' Method
First Application of the Act on the Regulation of Concealment of Criminal Proceeds

The prosecution can now punish criminals who lend their bank accounts to operators of illegal gambling sites and embezzle gambling funds deposited into those accounts. This follows a recent guilty verdict with imprisonment under the “Act on the Regulation of Concealment of Crime Proceeds” for acts of embezzling gambling funds. Until now, only those who sold such bank accounts were punished, but penalties have been strengthened for account holders who embezzle gambling funds after selling the accounts, setting a precedent for confiscating and recovering illegal gambling funds.

[Image source=Beomryul Newspaper]

The Daegu District Prosecutors’ Office’s Violent Crime Investigation Division (Chief Prosecutor So Chang-beom) recently uncovered an organization distributing “daepo” bank accounts in a case involving the operation of illegal game rooms. Four ringleaders were arrested and indicted on charges including violation of the Electronic Financial Transactions Act and the Act on the Regulation of Concealment of Crime Proceeds, while 12 related individuals were indicted without detention. The Daegu District Court sentenced the four ringleaders to prison terms of 2 years and 4 months, and 2 years, respectively. Additionally, the court confiscated 895.01 million KRW in illegal gambling proceeds linked to these four. This is the first case where a guilty verdict was handed down for the so-called “nureugi” crime involving daepo bank account holders used in illegal gambling operations. “Nureugi” refers to the act of secretly embezzling money deposited into daepo bank accounts.

This case came to light during supplementary investigations by the prosecution into the illegal game room operation case. It was discovered that the game room operator sold multiple accounts under their own and others’ names to illegal online gambling sites. During the investigation of the account holders, the prosecution found it suspicious that all were in their 20s to 30s residing in Daegu and Gyeongbuk, and that gambling funds deposited into the accounts were withdrawn around the same time. Further investigation revealed that they systematically sold daepo bank accounts to illegal gambling site operators and secretly withdrew the gambling funds once deposited.

Until now, in voice phishing crimes, the “nureugi” acts of daepo bank account holders were punished under embezzlement charges, but the same legal principle was not applied in illegal gambling cases. Courts punished account holders for embezzlement when money was withdrawn from daepo accounts used in voice phishing, considering it the misappropriation of victims’ funds. However, in illegal gambling cases, embezzlement charges were not recognized because gambling site users exchanged deposited funds for game money, etc. As a result, it was difficult to punish account holders for “nureugi” crimes related to illegal gambling and to recover illegal gambling funds.

After legal review, the prosecution applied the Act on the Regulation of Concealment of Crime Proceeds separately from the sale of daepo bank accounts to members of the daepo account distribution organization. Their acts of arbitrarily withdrawing and using gambling funds were regarded as receipt of criminal proceeds. Article 4 of the Act states, “A person who knowingly receives criminal proceeds shall be punished by imprisonment of up to three years or a fine of up to 20 million KRW.”

Presiding Judge Kim Seok-su of the Daegu District Court stated, “The defendant conspired with others and received criminal proceeds generated from the serious crime of operating a gambling space punishable by imprisonment or confinement of three years or more,” and delivered a guilty verdict for violation of the Act on the Regulation of Concealment of Crime Proceeds (Case No. 2024고단271). The court applied the same reasoning in rulings against other indicted organization members (Case No. 2023고단4628).

Lee Hee-wook, then a prosecutor at the Daegu District Prosecutors’ Office’s Violent Crime Investigation Division (currently at Jeonju District Prosecutors’ Office Criminal Division 2), who led the investigation, explained, “It was difficult to apply embezzlement charges in ‘nureugi’ cases related to illegal gambling daepo accounts, so we sought alternative charges.”

The Supreme Prosecutors’ Office has informed district prosecutors nationwide of this case and plans to actively apply this legal principle in similar cases.

Reporter Lim Hyun-kyung, Legal Times

※This article is based on content supplied by Law Times.