Prosecutors move to freeze bank accounts connected to gambling, drugs

Social Affairs

Published: 11 Dec. 2023, 19:07

Prosecutors move to freeze bank accounts connected to gambling, drugs

The Supreme Prosecutors' Office in Seocho District, southern Seoul, on Sept. 4. [NEWS1]

Bank accounts used for illegal gambling and drug crimes in Korea may soon be subject to freezing upon the request of victims and investigating authorities.

According to prosecutors on Monday, the Supreme Prosecutors’ Office is pushing to amend legislation allowing institutes and individuals to freeze so-called daepo (fraud) accounts based chiefly on stolen identities.

Under the Special Act for Financial Fraud Protection by Telecommunications legislated in 2011, only bank accounts used for voice phishing scams can be frozen when victims apply for remedy procedures and investigating authorities request it.

This month, the prosecutor organization plans to discuss amending the law with related institutes, including the Financial Services Commission. They aim to expand the scope of crimes associated with bank accounts that can be frozen upon request to gambling and drug offenses.

Identifying individuals involved in online gambling, in particular, is challenging, given their use of overseas servers and evasive platforms like Telegram.

Officials anticipate that freezing accounts will be more effective in preventing crimes, particularly as illegal gambling websites can quickly reappear even if authorities block them.

The Korean government has been actively combating illegal gambling and drug crimes, setting up a task force to prevent gambling among teenagers and establishing a team within the Office for Policy Coordination to develop measures for punishing drug offenders and supporting victims this year.

“Freezing bank accounts associated with drug and gambling crimes will be impactful, similar to its effectiveness in preventing damages from voice phishing scams,” a prosecutor said.

“We will thoroughly explain the necessity of improving the law after discussing it with financial institutes.”

The prosecutors expect freezing such bank accounts will also easily allow them to confiscate criminal proceeds during trials.

However, as such procedure can be misused, the prosecutors are considering pushing measures that will only allow investigators to request a bank account freeze.

Cases of people misusing the law and blackmailing people have emerged, as any bank account can be frozen after an individual reports the bank account for fraud if there are records of it.

The crime typically occurs after a person asks an individual to send some money to another person’s bank account for secondhand sales or other purposes. Then, the consumer reports the bank account for fraud, which will become frozen accordingly.

The person who set up the scheme will then blackmail the owner of the frozen bank account, saying they will unfreeze the account if they send money.

The criminal has no authority to do so, but many pay them because they are unfamiliar with the law.

Victims of voice phishing scams suffered 543.8 billion won ($412 million) in losses in 2022, a 34 percent increase from 2018, according to the National Police Agency.

People Power Party Rep. Yun Chang-hyun proposed a revised bill in July to prevent such crimes, which is still under discussion at the National Assembly.

BY LEE CHANG-HOON, CHO JUNG-WOO [cho.jungwoo1@joongang.co.kr]