[La Deok-yeon Gate] Prosecutors Secure 15.2 Billion KRW in Criminal Proceeds from La Deok-yeon Group... Indictment This Week

KRW 15.2 Billion Total, KRW 5.5 Billion Crime Proceeds Owned by Ra Deok-yeon
Three Detained Suspects to Be Indicted This Week Due to Expiration of Detention Period

The prosecution investigating the 'SG Securities-triggered crash' has secured 15.2 billion KRW in criminal proceeds from the stock price manipulation group. Considering that the detention period for three suspects, including CEO Ra Deok-yeon Hoan (42), is running out soon, the prosecution plans to indict the detained suspects as early as this week.

On the 23rd, a representative from the Seoul Southern District Prosecutors' Office stated that the actual criminal proceeds secured by the prosecution from Ra and the stock price manipulation group amount to 15.2 billion KRW. Of this, 5.5 billion KRW in criminal proceeds owned by CEO Ra consists of real estate, lease deposits, vehicles, office lease deposits, and vehicle lease deposits.

[Image source=Yonhap News]

The prosecution is making efforts to recover the criminal proceeds from the stock price manipulation group. So far, the prosecution has filed pre-indictment seizure preservation requests and obtained court approval for criminal proceeds amounting to 264.2 billion KRW from CEO Ra and the group. Approximately half of this, about 132.1 billion KRW, is understood to have been taken as fees. The pre-indictment seizure preservation measure is a procedure to freeze the criminal proceeds so that suspects cannot dispose of them before indictment. In other words, the amount identified by the prosecution as criminal proceeds is 264.2 billion KRW, of which the prosecution has actually secured 15.2 billion KRW.

However, it is uncertain whether the entire amount seized will be recognized as unjust enrichment. A prosecution official said, "There will likely be disputes in court regarding the calculation of unjust enrichment," adding, "Some voices call for simplifying the proof process related to unjust enrichment calculation." In fact, criticism has been raised that light punishments are being imposed due to difficulties in calculating unjust enrichment. When the unjust enrichment amount is difficult to calculate, the maximum fine a suspect must pay is set at 500 million KRW. If the amount is not clearly calculated, a suspect who has obtained a large amount of criminal proceeds may only have to pay up to 500 million KRW in fines.

This concern appears to be shared by financial authorities as well. At the 'Joint Discussion Meeting of Related Agencies for Eradicating Unfair Trading' held that day, Kim Kwang-il, Director of the Fair Market Division at the Financial Services Commission, stated, "We will introduce surcharge penalties for the three major unfair trades (insider trading, market manipulation, unfair trading) and legislate standards for calculating unjust enrichment to ensure appropriate punishment."

[Image source=Yonhap News]

The prosecution is continuing to track overseas assets such as golf courses abroad but is facing difficulties. A prosecution official said, "Even if a seizure preservation order is issued in Korea, it is questionable how much foreign institutions will accept it." He added, "For example, in the case of real estate, registration can be immediately canceled domestically, but this may vary depending on the country."

With the detention period for the three detained suspects nearing expiration, the prosecution plans to indict them as early as this week. According to the Criminal Procedure Act, if the prosecution detains a suspect, they must file an indictment within 20 days (including one extension), or the suspect must be released. This period also includes the time the suspect is arrested or detained. CEO Ra, his associate Byeon Mo (40), and former professional golfer Ahn Mo (33) were arrested on the 9th on charges of violating the Capital Markets Act and the Act on Concealment of Criminal Proceeds, and detention warrants were issued. A prosecution official said, "It has not yet been decided whether other suspects will be indicted together," and explained, "The main stock price manipulation group will face the same charges as the three detained suspects."

Meanwhile, the prosecution revealed that it is reviewing the securities nature of WEMIX coin, which was at the center of the 'coin controversy' involving Kim Nam-guk, a member of the Democratic Party of Korea. A prosecution official said, "If it is a coin-related case, the securities nature is reviewed," adding, "If the coin has securities characteristics, the Capital Markets Act applies; if not, charges such as obstruction of business related to coin exchanges or coin issuance may apply, leading to differences in legal treatment."

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