[La Deok-yeon Gate] Prosecution Moves to Secure Criminal Profits... Victim Recovery 'Likely Not Easy'

Prosecutors Consider Seizure Preservation and More to Secure Criminal Proceeds
Precise Legal Application Needed to Recover Damages

Prosecutors investigating the 'SG Securities-led Stock Price Crash Incident' are intensifying efforts to secure the custody of key suspects, including CEO Ra Deok-yeon and Hoan, as well as to recover criminal proceeds.

On the 16th, a prosecution official stated that various methods are being considered to secure the criminal proceeds of Ra and other stock manipulation perpetrators through seizure and preservation measures. Regarding the possibility that they hid criminal proceeds overseas, the official added, "We are tracking all criminal proceeds."

[Image source=Yonhap News]

The key to recovering criminal proceeds lies in how much of the proceeds hidden by the stock manipulation perpetrators the investigative authorities can uncover. Currently, prosecutors understand that Ra Deok-yeon and others gained an unfair profit of 264 billion KRW through stock manipulation, of which 132 billion KRW was siphoned off through commissions. So far, it is known that prosecutors have seized one Rolls-Royce vehicle belonging to Ra’s closest aide, Byun Mo, and one Mercedes-Maybach vehicle belonging to former professional golfer Ahn Mo. Prosecutors are investigating circumstances confirming that they received commissions from investors through restaurants, golf courses, and equestrian centers, using these as money laundering channels to conceal criminal proceeds.

Meanwhile, there is also a view that recovering damages caused by stock manipulation may be difficult. Yang Tae-jung, chief attorney at Law Firm Gwangya, said, "If the perpetrators have hidden or already squandered their assets, recovering damages will not be easy." He added, "It is necessary to take preservation and provisional seizure measures on the perpetrators’ assets in advance and monitor and track any assets they attempt to hide."

A prosecution official said, "The Seoul Southern District Prosecutors’ Office has a prosecutor dedicated solely to recovering criminal proceeds," and added, "We will strive to obtain maximum seizure and preservation orders related to criminal proceeds from the court."

Experts explain that precise legal application by investigative authorities is necessary to return criminal proceeds to investors who suffered losses from stock manipulation. Currently, the charges applied by prosecutors to Ra, Byun, Ahn, and other stock manipulation perpetrators include violations of the Capital Markets Act and the Act on Concealment of Criminal Proceeds. If it is proven that the stock manipulation perpetrators operated in a multi-level marketing manner to recruit investors, there is also a possibility that fraud charges under the Act on the Aggravated Punishment of Specific Economic Crimes may be applied.

[Image source=Yonhap News]

Seung Jae-hyun, senior research fellow at the Korea Institute of Criminal Justice Policy, suggested, "For violations of the Capital Markets Act, confiscation and seizure should be enforced, and for the multi-level marketing fraud against investors, fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and the Act on the Confiscation of Corrupt Property should be applied together so that the state can assist victims’ recovery with the confiscated amounts." He noted that setting criteria to distinguish between accomplices and victims will also be crucial in this process.

Meanwhile, the government and ruling party held an emergency meeting on the 9th and announced plans to amend the Capital Markets Act to increase penalties for stock manipulation crimes. Park Dae-chul, chairman of the People Power Party Policy Committee, said, "In addition to existing criminal penalties, we will establish a surcharge system to recover up to twice the amount of unfair gains."

※ The recent SG Securities-led stock price crash incident has sounded an alarm for the order of the capital market. Readers’ reports will be a great help in uncovering the truth. We welcome any reports regarding investment damage cases, suspicions of stock manipulation and asset concealment by Ra Deok-yeon’s side, details related to the large-scale sale by major shareholders of Dow Data and Seoul Gas, or any other information (jebo1@asiae.co.kr). Asia Economy will do its best to establish a transparent capital market order.

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