Stock Leading Room and Virtual Property Crime Victims Compensation Promotion

Court Applies Telecommunications Fraud Compensation Law

Victim Relief Provided in Boice Phishing

A Supreme Court ruling has expanded the scope of the Telecommunications Fraud Compensation Law, which supports the recovery of damages for victims of financial fraud using telecommunications networks. As a result, victims of not only Boice Phishing crimes but also Stock Leading Room and Virtual Property crimes can now receive compensation.

According to legal sources on the 3rd, the Supreme Court's First Division (Chief Justice Seo Kyung-hwan) confirmed on the 28th of last month the original ruling that sentenced seven members of an organization, including the head of a gift trade company accused of telecommunications financial fraud, to 3 to 8 years in prison and a total fine of 9.4 billion won. The perpetrators impersonated employees of investment leading companies, calling numerous unspecified individuals to recruit members, and installed HTS programs on members' computers to enable them to invest directly in financial investment products.

However, the HTS programs they provided were 'fake' programs not linked to the gift accounts of real securities companies. The investment funds received from members were transferred to the accounts of the gift trade organization. It was revealed that Mr. A alone embezzled 26.4 billion won through such acts.

The first trial court recognized most of the charges as guilty but viewed the telecommunications financial fraud as innocent under the Telecommunications Fraud Compensation Law. However, the second trial court and the Supreme Court saw the victims' actions as falling under telecommunications financial fraud, ordering additional compensation for the crime. The Supreme Court pointed out that "the reason for excluding exceptions in the regulation target is to prevent general transactions related to online commerce from being regulated as Boice Phishing." It further stated, "The original ruling is justified in viewing the actions in this case as 'acts of providing goods or services for the purpose of reaping profits from the supply or use of goods or services' related to telecommunications financial fraud."

Reporter Min Kyung-jin min@hankyung.com