[Crying Commoners Over Financial Crimes]② '950 Million Won Loss, 0 Won Recovery Even If Criminal Caught'

Recovery from Damage 'Sudden Drop', Impact of Asset Price Decline
Police Agency "Efforts to Prevent Recidivism and Restore Damage"

Even when perpetrators are caught, ordinary citizens in South Korea who fall victim to financial crimes such as voice phishing and virtual asset fraud rarely recover their financial losses.

The Seoul Eastern District Prosecutors' Office indicted a total of 30 members of a voice phishing organization last year. They swindled a total of 950 million KRW from 23 victims, but despite the arrests, none of the stolen money was actually recovered. Similarly, the National Police Agency's National Investigation Headquarters apprehended a voice phishing gang last month that had collected 6.1 billion KRW by impersonating malicious apps, but they were unable to recover the criminal proceeds.

A police official stated, "Recently, financial crimes targeting ordinary citizens, such as voice phishing, have been increasing, but it is becoming even more difficult for investigative authorities to confiscate criminal proceeds."

According to the National Police Agency on the 3rd, out of the 1.0192 trillion KRW in damages caused by illegal activities including virtual assets last year, only 438.9 billion KRW was recovered, accounting for just 43% of the total. The proportion of recovered assets relative to total damages was 9% in 2019, 38% in 2020, and 27% in 2021, with no year seeing more than half of the losses of ordinary citizens restored. Among the recovered assets last year, virtual assets accounted for 153.8 billion KRW (35%), followed by real estate (149.3 billion KRW, 34%) and deposit claims (104.9 billion KRW, 24%).

A police official said, "Financial crimes are becoming increasingly sophisticated with factors such as the overseas residence of crime masterminds, the formation of cell organizations, and the use of nominee accounts. Moreover, since virtual assets like coins are also utilized, it is often difficult to grasp the actual situation." This is why there are concerns that in the Gangnam female kidnapping and murder case that occurred on the 29th of last month, if the perpetrators had secured and concealed tens of billions of won in the victim’s coins before being caught, recovery would be very difficult.

Despite the prosecution and police agencies apprehending suspects, the recovery of criminal proceeds remains sluggish, leading to calls for investigations into financial crimes targeting ordinary citizens to focus more on actual damage restoration.

The police explained, "In many cases of financial fraud, the masterminds reside overseas, and criminals living abroad often do not hold assets domestically. If they withdraw money from Account A and suddenly deposit it into Account B, it is difficult to prove that the money is criminal proceeds."

Professor Kim Do-woo of the Department of Police Science at Gyeongnam National University said, "Since criminal proceeds inevitably go through money laundering processes, it is realistically very difficult for investigative agencies to trace and restore the losses of ordinary citizens. When financial crimes are committed, it should not end with criminal punishment; measures should be sought to compensate victims until their losses are substantially recovered."

Professor Lee Woong-hyuk of the Department of Police Science at Konkuk University said, "South Korea’s criminal justice system focuses on punishing criminals. In cases of financial crimes, what ordinary victims most want is to recover even small amounts of lost assets and return to normal daily life. Therefore, the government needs to expand related personnel and promote legal and institutional improvements."

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