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Halving a Prison Sentence on Appeal and Vacating a Restitution Order in an Account-Lending and Embezzlement Case

Background

Our client was charged with lending his electronic financial access media (bankbooks, cards and other means of using an account) to others, in violation of the Electronic Financial Transactions Act, and with embezzling more than KRW 100 million. The access media he lent were actually used in phone scams.

In April 2025 the first-instance court sentenced him to one year in prison and granted restitution applications filed by two victims (requests that a criminal court also order compensation).

What Was at Stake

On appeal, the issues were whether the one-year sentence was too heavy and whether the restitution order could stand after the defendant's relationship with the victims had changed.

How Changchun Helped

Law Firm Changchun represented our client on appeal and argued the sentence was excessive. The appellate court accepted these factors:

  • Admission and record: Our client admitted all charges and had no record of similar crimes or of any penalty heavier than a fine.

  • Benefit: A substantial part of the embezzled money had been transferred to others, so he did not appear to have fully enjoyed the proceeds.

  • Restoring losses: He compensated one victim during the investigation, settled with both restitution applicants on appeal, and deposited KRW 20 million with the court for another victim's side, who agreed to accept it.

Because settlements had been reached, the court found the scope of liability was no longer clear and the restitution order could not stand.

Outcome

In May 2026 the appellate court vacated the sentencing part of the judgment and imposed six months in prison. A prison term was kept given the social harm of lending access media, but the sentence was cut in half. The restitution order was vacated and both applications were dismissed.

Even after a prison sentence and restitution order at first instance, concrete steps to restore victims' losses through settlement and court deposit can reopen both the sentence and the restitution order on appeal. (Outcomes depend on the facts of each case.)

Case articles are anonymized within the scope of client consent and are provided for general information only, not as legal advice on any specific matter. Outcomes may differ depending on the facts of each case.