Sentencing Guidelines to Be Revised for Surprise Deposits and Accounting Fraud

Deliberating Amendments to Prevent "Secret Deposits" and "Stealth Deposits"
Supreme Court to Finalize Recommended Sentencing Range in March

The Supreme Court Sentencing Commission has decided to revise its sentencing guidelines for court deposits in order to prevent so-called "surprise deposits" that do not take the victim's position into account. The commission will also newly review the recommended sentencing range for securities and financial crimes, including the preparation of "false financial statements."

On August 12, the commission announced that it had deliberated on a draft amendment to the sentencing guidelines, which includes revising sentencing factors related to victim restitution, at its plenary meeting the previous day. The commission plans to delete the phrase "including court deposits" from the list of sentencing factors in all sentencing guidelines.

A court deposit is a system in which money is entrusted to the court so that the victim can receive it at a later time. However, there have been frequent cases where offenders, aiming only for a reduced sentence, made "secret deposits" or "stealth deposits" without the victim's knowledge or consent and then received mitigation. Criticisms have continued over whether the courts should recognize such secret deposits made solely to gain leniency from the court, without any apology to the victim.

The commission explained, "This is intended to dispel concerns that the phrase 'including court deposits,' listed as one method of victim restitution, could be misunderstood as automatically constituting a mitigating factor simply by making a deposit."

The commission will also include all offenses of "preparing or disclosing false financial statements and making false entries in audit reports," as well as "forgery or alteration of accounting information and audit records," as crimes subject to sentencing guidelines, reflecting the expanded requirements under the amended Capital Markets Act and External Audit Act. The classification method based on "amount of criminal gains or avoided losses" will remain unchanged.

After further meetings, the commission will establish the recommended sentencing range and sentencing factors for securities and financial crimes, with the final decision scheduled for March next year.

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