Fraud, Embezzlement and Breach of Trust

Fraud requires an unbroken chain: deception, a mistaken belief caused by it, a handover of property based on that mistake, and a resulting gain. The mere fact that you did not repay is not enough; it must be shown that you had no intention or ability to repay when you received the money.

So investigators look at the day you received the money: your income and assets, other debts, what you said the money was for, and what you actually used it for. If you used the money for the stated purpose and have repaid even part of it, those records are your most important defense materials. On the other hand, if you described the purpose differently or overstated your financial situation, that becomes the issue.

Embezzlement (횡령) is using property entrusted to you as if it were your own or refusing to return it. Breach of trust (배임) is when someone handling another's affairs neglects their duty and causes a loss. In cases involving company funds, investment money or settling accounts between business partners, both crimes are often alleged together.

Disputes usually arise over whether you were in a position of holding the money, whether you had authority or approval to spend it, and whether you intended to put it back later. An explanation that it was a long-standing company practice is accepted only with materials such as approval documents, accounting records and past examples. Even when a CEO uses corporate money, the company and the individual are treated as separate, so embezzlement can be an issue.

If the gain is KRW 500 million or more, the Specific Economic Crimes Act applies instead of the Criminal Act, and there is no longer a path to a fine-only sentence. The amount of the gain changes depending on whether several transactions are grouped together or treated separately, so we calculate amounts and dates for each transaction.

If you are convicted under Article 3 of the Specific Economic Crimes Act, for a certain period you cannot work at financial institutions or at companies closely related to the crime, and cannot obtain related licenses or permits (Article 14 of the same Act). Because the career consequences are serious, we check from the start of the investigation whether the calculation of the gain can be disputed.

With the amendment of Criminal Act Article 328 on December 31, 2025, fraud, embezzlement and breach of trust between relatives are no longer exempt from punishment; instead, they became crimes that can be prosecuted only on the victim's complaint (applied through Criminal Act Articles 354 and 361). In these cases, you can also file a complaint against your own or your spouse's lineal ascendants, such as parents.

For crimes that require a complaint, you cannot file once 6 months have passed from the day you learned who the offender was (Criminal Procedure Act (형사소송법) Article 230). This special rule does not apply to accomplices who are not relatives. If you are considering a complaint over a money issue within the family, first write down the date you found out.

Under the addendum, the amended provision applies to crimes committed on or after June 27, 2024. For acts between family members from June 27, 2024 until the amended law took effect (December 31, 2025), there was a special rule allowing a complaint within 6 months of the effective date, so you must check the dates for each case to see whether the complaint period is still open.

Fraud, embezzlement and breach of trust can be punished even if the victim does not want punishment. However, how much of the loss has been made up for weighs heavily in whether you are indicted and in the sentence. If it is hard to repay the full amount at once, we submit a repayment plan together with records of actual partial repayment.

If you are the victim, Jisan Law writes the criminal complaint and goes with you to your questioning as the complainant, and separately from the criminal complaint, we also consider a provisional attachment (가압류) or a claim for damages. Criminal proceedings exist to punish, not to collect money for you. Whether you take steps to preserve assets before the other side hides them affects recovery.