Is Recovery Possible for 'LH Speculation Allegations'... Not Possible if Deceased

If There Is No Guilty Verdict, Confiscation Is Also Difficult

Land in Gwarim-dong, Siheung-si, Gyeonggi-do, where allegations of land speculation by some employees of Korea Land and Housing Corporation (LH) in the Gwangmyeong and Siheung new towns have been raised / Siheung = Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporters Seongpil Cho, Daehyun Kim] The two current employees of Korea Land and Housing Corporation (LH) who recently took their own lives were neither subjects of investigation nor preliminary inquiry regarding allegations of speculation in the 3rd New Town development project. According to the police investigations conducted so far, there has been no confirmation that they were involved in this incident. If evidence of speculation is discovered during future investigations, even if they cannot be prosecuted, is it possible to recover the speculative profits?

Under the current Criminal Act, confiscation is imposed alongside other punishments. This means that the court can sentence confiscation together with other penalties such as imprisonment or fines, based on a guilty verdict. Since this type of punishment requires the accused to be brought to trial, it is impossible to prosecute or confiscate assets from the LH employees who took their own lives. Previously, the Supreme Court ruled in 1992 that "under our legal system, there is no provision to impose confiscation or supplementary confiscation without prosecution," and "imposing confiscation or supplementary confiscation on unprosecuted criminal facts violates the principle of non-impairment." This clearly shows the limitations of the current confiscation system.

There is an exception under the Criminal Act. Article 49 of the same law states that "even if the offender is not sentenced guilty, confiscation alone may be imposed if the conditions for confiscation are met." However, the Supreme Court has also ruled that "prosecution must be initiated for confiscation to be possible," making it difficult to apply this to the current case. Lawyer Jaekwon Lee of Dongin Law Firm explained, "This exception allows confiscation without a guilty verdict if there are profits obtained from criminal acts," but added, "Since it is impossible to prove the criminal acts of deceased individuals, confiscation will be difficult."

The current confiscation system also reveals loopholes regarding current and former employees under investigation. Even if these individuals are prosecuted and found guilty of violating the Act on the Prevention of Corruption and the Establishment and Operation of the Anti-Corruption and Civil Rights Commission (Anti-Corruption Act), it is still difficult to apply confiscation because land compensation has not yet been realized. Confiscation is only possible when actual profits from criminal acts have been realized. Former lawmaker Hyewon Son, who was sentenced to prison in the first trial for violating the Anti-Corruption Act, was subject to confiscation because the price of the land she purchased had increased.

However, lawyer Wonyong Kim of Dasol Law Firm stated, "Although there are not many precedents related to confiscation, given the seriousness of the LH case, there is room to confiscate land where profits have not yet been realized." Previously, Minister of Land, Infrastructure and Transport Changheum Byun also said, "We are reviewing whether land confiscation is possible even if profits have not been realized." The ruling party is reportedly discussing legislative amendments that would allow confiscation to be imposed separately without a court's guilty verdict, even in cases where the suspect has committed suicide or prosecution is not possible. However, since such amendments would require retroactive application, constitutional issues are expected to arise.

This content was produced with the assistance of AI translation services.