Supreme Court: Victims Unaware of Voice Phishing Not Liable for Aiding Illegal Acts

The Supreme Court has ruled that victims who found it difficult to foresee such fraudulent acts cannot be held jointly liable for illegal acts when a voice phishing criminal approached both the seller and buyer of goods and committed so-called 'third-party fraud.'

According to the legal community on the 26th, the Supreme Court's First Division (Presiding Justice Oh Kyung-mi) overturned the part of the second trial ruling related to the alternative claim (damages for illegal acts) in the appeal trial of a lawsuit filed by construction machinery dealer Bae against excavator seller Kang for the return of unjust enrichment, and remanded that part of the case to the Daejeon District Court. The second trial had partially ruled in favor of the plaintiff, ordering Kang to return 24 million KRW to Bae.

Previously, the second trial court recognized Kang's liability for returning unjust enrichment of 4 million KRW and damages for illegal acts amounting to 20 million KRW. However, the Supreme Court found it difficult to acknowledge Kang's joint illegal act liability as recognized by the second trial.

Supreme Court, Seocho-dong, Seoul.

The court stated, "It is difficult to find that the defendant had foreseeability of the illegal acts of the unidentified fraudster or that there was a substantial causal relationship between the defendant's actions and the illegal acts," adding, "Nevertheless, the lower court recognized the defendant's liability for illegal acts by aiding negligence, which violates the rules of logic and experience, exceeds the limits of free evaluation of evidence, and misapplies the legal principles regarding illegal acts by aiding negligence," explaining the reason for overturning and remanding.

On November 22, 2021, Kang registered his excavator for sale on an online construction machinery trading site with a desired price of 65 million KRW. Voice phishing criminal A saw this and called Kang, requesting him to take down the sales post, claiming he would purchase the excavator.

A then requested and received via text message from Kang the latest photos of the excavator, the construction machinery registration certificate, Kang's seal certificate, the construction machinery transfer certificate, and Kang's bank account number?all necessary documents for the excavator sale.

Although Kang found it odd that A's phone number was not registered as a friend on KakaoTalk, he did not conduct any special verification of A's identity.

A few days later, on November 30, 2021, A approached construction machinery dealer Bae, impersonating Kang, and deceived him by saying he wanted to sell the excavator originally listed at 65 million KRW for 54 million KRW. Bae, offered a price much lower than the market value, instructed his employee to verbally agree on the excavator sale contract with A on the same day.

The next day, December 1, 2021, Bae signed a sales contract with A and received photos of Kang's account number, seal certificate, original registration certificate, and transfer documents?documents A had obtained from Kang by deception.

Believing A to be Kang, the excavator owner, Bae transferred 54 million KRW to Kang's account sent by A. After confirming the transfer, A immediately called Kang, pretending to have sent the 54 million KRW himself.

A told Kang, "Due to tax reporting issues, the transaction amount must appear in the bank account," and said, "If you send 50 million KRW to an account I designate, I will immediately transfer 61 million KRW." Earlier, A had told Kang that the smart banking or internet banking transfer limit should be about 50 million KRW to allow the amount to be moved in and out after the payment was deposited, showing meticulous planning to get Kang's acceptance.

Suspecting that A was making this request to evade taxes, Kang transferred 50 million KRW to B's account as designated by A without much suspicion. Although the names of the sender (Bae) who transferred 54 million KRW and the recipient (B) of 50 million KRW were different, Kang did not question this because the ownership transfer documents had not yet been handed over, the excavator had not been delivered, and Kang believed A was the person who sent the 54 million KRW.

However, A did not send the promised 61 million KRW and later cut off contact. During the investigation, it was found that A paid B a certain fee and used the 50 million KRW to purchase Bitcoin, transferring it to a virtual currency wallet address designated by himself.

Ultimately, a dispute arose between Bae, who believed he had purchased the excavator for 54 million KRW, and Kang, who thought he had only received 4 million KRW from the sale. They later realized they were victims of A's fraud.

Bae, unable to acquire ownership of the excavator despite transferring 54 million KRW, filed a lawsuit against Kang, claiming that Kang had unjustly gained the 54 million KRW transferred from Bae's account and should return it.

However, the first trial court rejected Bae's claim. The court judged that Kang's unjust enrichment was only 4 million KRW, excluding the 50 million KRW transferred to the account designated by A.

The court found that Kang was also deceived by A's fraud and only retransferred 50 million KRW from the 54 million KRW received, and it was difficult to see that Kang conspired with or assisted A's crime. Moreover, Kang was considered an indirect victim of A's illegal act (fraud), as he might have lost ownership of the excavator without receiving the payment properly if things had gone wrong.

The court stated, "At least regarding the 50 million KRW returned to A, it is difficult to evaluate that the defendant gained substantial benefit as a requirement for the obligation to return unjust enrichment, and imposing the obligation to return on the defendant, who gained no benefit, would only replace the final victim of the fraud from the plaintiff to the defendant, which is inconsistent with the purpose of the unjust enrichment system based on justice and equity. The ultimate beneficiary of the 50 million KRW is the voice phishing criminal A, not Kang."

However, the second trial court ruled differently from the first, ordering Kang to pay 24 million KRW to Bae.

Bae appealed the first trial ruling and, in addition to the initial claim for return of unjust enrichment, made an alternative claim that Kang negligently aided A's fraud, holding Kang liable for joint illegal acts and damages.

Under civil law, a person who aids an illegal act is jointly liable for damages, and unlike criminal law, civil law recognizes aiding by negligence.

The second trial court dismissed Kang's appeal against the 4 million KRW unjust enrichment liability recognized by the first trial and upheld that ruling. Additionally, it held Kang liable to pay Bae 20 million KRW plus interest as a joint tortfeasor due to negligent aiding.

The court pointed out, "The defendant was aware that the transaction method for the used construction machinery excavator was unusual and abnormal, and that the unidentified fraudster had illegal or illicit intentions, yet made no attempt to investigate why the names of the 54 million KRW depositor and the 50 million KRW recipient differed, nor did he attempt any verification procedures at the sales site before transferring 50 million KRW."

It added, "It is reasonable to find that the defendant could have foreseen that this transaction would be used for phishing crime, but instead, the defendant mistakenly believed it was merely a tax evasion offense and actively cooperated by accepting and executing the transfer of 50 million KRW to the account designated by the unidentified person, thereby aiding the fraud and causing a substantial causal relationship between the defendant's negligent aiding and the plaintiff's damages."

The court based its judgment on factors such as Kang's suspicion that A's phone number was not registered on KakaoTalk but did not try to verify A's identity, and Kang's active cooperation in transferring 50 million KRW to an account under a different name, assuming it was for tax evasion.

However, considering Bae's own negligence, the court limited Kang's damages liability to 20 million KRW.

Bae's negligence included skipping the procedure to register under his own name and immediately reselling for illicit profit, leaving the sales date and buyer's personal information blank, requesting a construction machinery transfer certificate with only Kang's seal, and transferring 54 million KRW immediately upon receiving photos of the transfer certificate and excavator loaded on a transport vehicle without verifying the item.

However, the Supreme Court's judgment differed.

The Supreme Court found it difficult to view the excavator transaction process as abnormal from Kang's perspective and regarded Kang as an indirect victim of the voice phishing crime.

The court stated, "The defendant can be seen as a victim who was deceived by the unidentified fraudster's words and sent photos of the excavator, construction machinery registration certificate, seal certificate, transfer certificate, and bank account number via text message for the purpose of selling the excavator, and the defendant received no compensation related to this."

It added, "Sending such photos at the request of the unidentified fraudster pretending to purchase the excavator was a natural act necessary for confirming the condition, proper registration, and ownership of the excavator during the sales process, and was not an unusual or abnormal transaction."

The court also noted, "At that time, the defendant had no relationship with the plaintiff or the unidentified fraudster and there was no evidence suggesting that the defendant could suspect the fraudster would use the excavator photos for phishing."

Furthermore, the court said, "The plaintiff was already deceived by the unidentified fraudster and transferred 54 million KRW to the defendant's bank account, disposing of the money, and the defendant merely transferred the money to another account at the request of the fraudster, whom the defendant believed to be the buyer and sender of the money. It is difficult to find that the defendant had an obligation not to perform such a transfer in relation to the plaintiff."

The plaintiff Bae's transfer of 54 million KRW to Kang, deceived by A, constituted a disposition act under the crime of fraud, meaning A was already a victim of fraud. For Kang's transfer of 50 million KRW to be recognized as negligent aiding of A's illegal act, Kang must have had a duty of care, which is difficult to acknowledge.

Finally, the court stated, "The defendant had not yet handed over the ownership transfer documents or delivered the excavator to the unidentified fraudster, so the transfer was not an unusual or abnormal transaction by the seller, and it is difficult to find that the defendant could have foreseen that the transferred money would be appropriated by the fraudster."

Since the requirements for joint illegal acts by negligent aiding, such as breach of duty of care or foreseeability, were not met, the Supreme Court concluded that Kang cannot be held liable as a joint tortfeasor for A's illegal acts.

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