Loan Shark CEO Charged 3000% Interest Without Penalty... Supreme Court Orders Retrial

The Supreme Court has ruled that if interest is received exceeding the statutory maximum interest rate, the proceeds can be confiscated under the Act on the Regulation and Punishment of Criminal Proceeds Concealment.

The Supreme Court's Second Division (Presiding Justice Min Yu-sook) announced on the 24th that it overturned the original sentence of 1 year and 2 months imprisonment in the appeal trial of Mr. A, who was indicted for violating the Loan Business Act and the Act on the Regulation and Punishment of Criminal Proceeds Concealment, and remanded the case to the Suwon District Court.

Mr. A was indicted on charges of operating a loan business without registration and receiving a total of 1 billion KRW from 538 people over 4,138 times from October 1, 2021, to June 30, 2022, in the name of loan principal and interest, exceeding the statutory maximum interest rate (20% per annum). He was also charged with pocketing 187.47 million KRW from 116 people in excess of the principal and statutory interest beyond the legal maximum interest rate.

The first trial court found Mr. A guilty and sentenced him to 1 year and 6 months imprisonment. It also ordered the confiscation of a total of 497.47 million KRW, including an estimated monthly profit of 310 million KRW and the excess interest amount of 187.47 million KRW.

The second trial court also found the charges to be true but reduced the sentence to 1 year and 2 months imprisonment, considering Mr. A's remorse, partial payment of settlement money, and criminal deposit. However, the second trial court excluded the estimated profit of 310 million KRW, which the first trial court had considered subject to confiscation, stating that "confiscation aims to prevent the retention of illicit gains, so the confiscation target is limited to the benefits that have been substantially attributed to the defendant."

The Supreme Court ruled that the confiscation part should be reconsidered and sent the case back to the second trial court.

The court stated, "The Act on the Regulation and Punishment of Criminal Proceeds Concealment defines 'property obtained from criminal acts corresponding to serious crimes or property obtained as compensation for such criminal acts' as criminal proceeds, and stipulates that if criminal proceeds cannot be confiscated, their value can be confiscated." It added, "'Property obtained from criminal acts' includes not only property newly created by criminal acts of serious crimes but also property acquired through such criminal acts."

It further stated, "Violation of the Loan Business Act by receiving interest exceeding the statutory interest rate constitutes a serious crime under the Act on the Regulation and Punishment of Criminal Proceeds Concealment," and judged that "if the same reasoning as the second trial court is followed, it would result in the inability to confiscate interest received in excess of the statutory interest rate."

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