Fraud and Extortion: Elements and Examples

Based on 48 consultation cases · Updated October 4, 2026 · Translated from the Korean original.

The key issue in fraud is whether deception caused another person to act under a mistake, leading to the acquisition of property or a property benefit; merely being unable to repay money does not immediately establish fraud. Extortion involves obtaining a property benefit by frightening someone through intimidation, and requires consideration of whether the victim took an act of disposition.

People involved → Person accused of deception or intimidation → Person affected by the conduct → Person seeking a property benefit → Someone obtains or seeks a property benefit → Did deception cause another person to act under a mistake? → Yes → Did that act involve a property disposition and acquisition of property or a benefit? → No → Did intimidation lead the victim to dispose of property for a benefit? → Yes — Criminal Act Article 347 → Fraud may apply if the required elements are established → Extortion may apply when intimidation obtains a benefit through victim disposition → For a loan, check intent and ability to repay when borrowed → Later nonpayment alone does not establish fraud → Check whether a concealed fact would have changed the transaction → A failure to disclose may be fraud depending on the circumstances → Check whether deception was serious enough to undermine an ins…

Key points

Fraud requires consideration of the connection between deception, mistake, an act of disposition involving property, and the acquisition of property or a property benefit (Criminal Act, Article 347 (형법 제347조)).
For fraud involving a loan, the key issue is whether the borrower intended and was able to repay when borrowing the money; subsequent nonpayment alone does not establish fraud.
If someone knowingly fails to disclose a fact that would have prevented the other party from entering into the transaction, the conduct may, depending on the circumstances, constitute fraud by breach of a duty to disclose.
Even when someone is induced to sign or affix their seal without properly understanding the meaning of a dispositive document, the act of disposition required for fraud by procuring a signature may be established.
Insurance fraud does not automatically arise from a breach of the duty of disclosure; it must be considered whether there was intentional deception serious enough to undermine the fortuity of the insured event.
Fraud may be at issue if exaggeration or falsehood in product advertising goes beyond what is socially acceptable and misrepresents a fact material to the transaction.
Intimidation for extortion may include not only explicit words but also conduct or a show of authority that causes someone to perceive a threat of harm; however, the victim must have taken an act of disposition to provide a property benefit.

Frequently asked questions

Q. Does failing to repay borrowed money amount to fraud?

If the borrower intended and was able to repay when taking out the loan, but later became unable to repay because circumstances worsened, nonpayment alone does not establish fraud. Intent to defraud is assessed by considering the borrower’s financial circumstances when taking out the loan, the purpose of the loan, the repayment plan, and the circumstances of the transaction as a whole.

Case 11, Case 12, Case 16

Q. Is it fraud to lease a home without disclosing that it is in foreclosure?

If it is clear that the tenant would not have entered into the lease had they known that foreclosure proceedings were underway, the landlord may have a duty to disclose this. Case law has been cited holding that the conclusion does not change merely because the tenant could have checked the property register.

Case 20

Q. Is it fraud to conceal that a real estate sale contract has already been made with someone else?

The mere failure to disclose that another sale contract had already been entered into does not necessarily establish fraud. However, fraud may be at issue if the fact was used to defraud a new buyer of the purchase price, or if circumstances that would obstruct the buyer’s ability to secure their rights or perform the contract were concealed.

Case 7

Q. What happens if someone claims to have been hospitalized to receive insurance benefits when they did not actually receive inpatient treatment?

Whether inpatient treatment was genuinely provided is assessed by considering the patient’s symptoms and treatment, their stay at the hospital, and their conduct. Fraud may be at issue if someone obtained a hospital admission certificate and claimed insurance benefits even though outpatient treatment would have been sufficient. A doctor who knowingly issued the certificate to facilitate the claim may be liable for aiding and abetting fraud.

Case 6

Q. When does failing to disclose a past medical condition when taking out insurance amount to fraud?

A breach of the duty of disclosure does not automatically constitute criminal fraud. It must be considered whether the conduct amounted to deception serious enough to undermine the fortuity of the insured event, such as concealing that the insured event had already occurred or that its occurrence was highly likely.

Case 8, Case 9

Q. Is it fraud to obtain someone’s signature or seal by misrepresenting the contents of a document?

Even if the person who signed did not properly understand the document’s meaning or consequences, an act of disposition may be found if they were deceived into signing or affixing their seal under a mistake, thereby causing property loss. The case concerns obtaining a signature and seal on a mortgage agreement by falsely claiming that the document was an application for permission to trade land.

Case 1

Q. Is it extortion to obtain a property benefit by making threats or throwing one’s weight around?

Even without an express threat of harm, conduct or a person’s position or show of authority may amount to intimidation for extortion if it causes the other person to anticipate an unfair disadvantage. However, extortion may not be established if the victim cannot be said to have taken an act of disposition transferring a property benefit—for example, where someone flees after assaulting another person without paying a fare.

Case 13, Case 21, Case 22

Q. Is it litigation fraud to make false statements or submit false evidence in a lawsuit?

A person does not commit litigation fraud merely by being mistaken about the facts or the law and believing and asserting that they have a right. The issue should be assessed cautiously, and only where the elements of a crime are clear, such as when someone knowingly makes an obviously false claim or fabricates evidence. In the case described, withdrawing a false claim is explained as an attempt.

Case 17

Q. Are the losses combined if someone commits fraud against multiple victims using the same method?

According to the case law cited in the examples, even where there is a single criminal intent and the same method is used, the legal interests of multiple victims are independent, and a separate count of fraud may be established for each victim. Accordingly, the gains obtained from multiple victims cannot automatically be aggregated to apply the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.

Case 25

Relevant laws

Criminal Act, Article 347 (형법 제347조)
Criminal Act, Article 347-2 (형법 제347조의2)
Criminal Act, Article 350 (형법 제350조)
Criminal Act, Article 360 (형법 제360조)
Credit Finance Business Act, Article 70(1)3 (여신전문금융업법 제70조 제1항 제3호)
Commercial Act, Article 651 (상법 제651조)
Civil Act, Article 103 (민법 제103조)
Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3(1) (특정경제범죄 가중처벌 등에 관한 법률 제3조 제1항)
Punishment of Minor Offenses Act, Article 1(11) (경범죄처벌법 제1조 제11호)
Pharmaceutical Affairs Act, Article 68 (약사법 제68조)
Medical Service Act, Article 56(3) (의료법 제56조 제3항)

Watch out for

Intent to commit fraud must be assessed at the time of the transaction; it should not be determined solely from the fact that the contract was not performed.
For fraud by omission, the specific circumstances of the transaction must be considered, including whether the other party was mistaken and whether there was a duty to disclose.
An act that frightens someone may not, by itself, be sufficient for extortion; it must also be determined whether the victim thereby provided or disposed of a property benefit.

Source cases

This guide was compiled by AI from the following Korea Legal Aid Corporation consultation cases (in Korean).

This guide is general legal information about Korean law, not legal advice for your situation. For a specific case, consult a lawyer or the Korea Legal Aid Corporation (call 132 in Korea).