“The Republic of Korea, the Fraud Capital.”
Have you ever heard the phrase:
“The Republic of Korea, the Fraud Capital.”
It is certainly a shameful label.
But is there actually any evidence behind this claim?
Once again, let’s examine the data piece by piece.
First, I selected the five largest economies in the world as a reference group.
Of course, this does not mean that South Korea is the world’s sixth-largest economy. Using the same criteria, South Korea would be roughly around 15th–16th place.
So why compare South Korea with some of the world’s largest economies?
The reason is simple.
Fraud and embezzlement are, ultimately, crimes closely connected to money.
That is why I focused on major economies as the comparison group and included South Korea alongside them.
Below is a crime comparison table covering six countries.
| Country | Total Crime | Fraud | Fraud Rate | Embezzlement | Embezzlement Rate |
|---|---|---|---|---|---|
| 🇰🇷 South Korea | Arbitrary value: 1,606,771 cases | 347,901 cases | 21.65% | 64,810 cases | 4.03% |
| 🇨🇳 China | 4,496,359 cases | 1,694,757 cases | 37.69% | — | — |
| 🇩🇪 Germany | 5,940,667 cases | 754,489 cases | 12.70% | 42,618 cases | 0.72% |
| 🇯🇵 Japan | Arbitrary value: approx. 860,000 cases | 46,011 cases | Approx. 5.35% | 15,795 cases | Approx. 1.84% |
| 🇬🇧 United Kingdom | Arbitrary value: approx. 6,700,000 cases | 1,131,946 cases | Approx. 16.89% | 12,137 cases† | Approx. 0.18%† |
| 🇺🇸 United States | Arbitrary value: 14,000,000+ cases | Arbitrary value: 80,020 cases† | Approx. 0.57%† | Arbitrary value: 9,976 cases† | Approx. 0.07%† |
The figures for South Korea’s total number of crimes, fraud, and embezzlement are estimated figures, not officially published single-year totals.
They were calculated by applying the average number of total crimes recorded during the first three quarters of 2023, as publicly reported by KICJ, to the unpublished fourth quarter.
Also, South Korea’s crime statistics do not simply represent every case reported to the authorities.
If they included every reported incident, the number would naturally be much higher.
KICJ states that its quarterly crime trend statistics are based on “criminal case registration.”
Therefore, South Korea’s fraud and embezzlement figures can be regarded as the number of criminal cases.
Civil disputes involving unpaid debts are not included.
Oh… as expected.
South Korea’s figures are not low either.
China is, as expected, quite high.
However, the difference in the number of cases between China and South Korea is fivefold.
If these figures are converted into cases per 100,000 people, I think the picture would change because of China’s overwhelmingly large population.
There is one thing that concerns me, though.
China’s total number of crimes appears to be unusually low.
This is not because of prejudice toward a particular race or country.
I simply mean that China’s population is several times larger than that of the other countries being compared, yet the publicly available total number of crimes is only this high. That raises a question.
Of course, India, which is also one of the two countries with the largest populations in the world, recorded 6,241,569 cases according to the NCRB (National Crime Records Bureau of India), Crime in India 2023.
Therefore, we cannot simply conclude that China’s crime figure is incorrect.
As for China, the reason the embezzlement category is left blank is that it was particularly difficult to separate and identify only the specific range of embezzlement cases I wanted.
The reason is that categories such as corruption involving public officials and the misappropriation or extortion of public property are often grouped together.
To compare China with the other countries on the same basis, I would need to find a figure for ordinary embezzlement alone, but that is not easy.
However, since the purpose was simply to understand approximately how large a share fraud accounts for within total crime,
the figure showing that fraud accounts for 37.69% of all recorded crime in China is, by itself, enough to confirm to some extent what I set out to examine with this comparison.
The fraud figures for the United Kingdom and Germany are also interesting.
Those of you who noticed it quickly may have thought, “Wait… what?”
Fraud is relatively high, while the number of embezzlement cases is low.
That is strange.
I think statistics show the movement of an entire body of data.
And that movement naturally includes many different things.
I consider fraud and embezzlement to belong to the same broader group,
so I could not simply overlook what that table was showing.
And the finale is provided by the United Kingdom and Germany.
The article will proceed roughly like this.
First, we will look at the number of fraud and embezzlement cases in South Korea,
along with what South Korea classifies as fraud and how these cases are counted.
And then,
we will look at foreign countries using the same framework.
| Category | Number of Cases | Share of Total Crime |
|---|---|---|
| Total Crime | Approx. 1,606,771 cases | 100% |
| Fraud | Approx. 347,901 cases | 21.65% |
| Embezzlement | Approx. 64,810 cases | 4.03% |
| Fraud + Embezzlement | Approx. 412,711 cases | 25.69% |
The table above shows the figures extracted for South Korea.
Now, let’s take a closer look at the approximately 350,000 fraud cases in South Korea and examine what types of fraud they include.
| Type of Fraud | KICJ Analysis (%) |
|---|---|
| Loan Fraud | 23.3% |
| Commercial Transaction Fraud | 20.5% |
| Telecommunications & Financial Fraud | 9.7% |
| Insurance Fraud | 8.6% |
| Investment Fraud | 7.2% |
| Fraudulent Use Without Payment | 6.1% |
| Loan Application Fraud | 5.5% |
| Other Fraud | 5.4% |
| Brokerage Fraud | 4.5% |
| Real Estate-Related Fraud | 3.6% |
| False Claims & Improper Benefit Fraud | 3.4% |
| Credit Card Fraud | 2.1% |
Loan fraud is in first place.
As I mentioned earlier, the crime figures I used are based only on criminal cases.
Why am I pointing this out?
Because while it may be easy to explain loan fraud simply as “borrowing money and not paying it back,” there are many situations where someone borrows money, fails to repay it, and the matter becomes a civil case instead.
For example:
Borrowing money + signing a promissory note + being unable to repay later because circumstances changed → generally civil non-performance of a debt obligation, not fraud.
That is how it works.
For it to be classified as fraud, the person must have had no intention or ability to repay from the time they borrowed the money, yet deceived the lender by claiming they would repay it → loan fraud.
That is the key distinction.
In other words, simply failing to repay money after signing a promissory note does not automatically make it loan fraud. The crucial question is whether there was an intention to deceive from the moment the money was borrowed.
That is what makes it clearly a case of fraud.
Since the other countries in our comparison also deal with criminal cases, I have no intention of adding the number of civil debt defaults or doing anything like that just to make the comparison more precise.
I just wanted you to be aware of the distinction.
The number of real-estate-related fraud cases, which I expected to be considerably higher, is only around 2–3%.
If you look through the list and think,
“Well, all of these really are fraud.”
then I have accomplished what I set out to do.
Now,
let’s take another look at the United Kingdom, Germany, and Japan.
| Country | Total Crime | Fraud | Fraud Rate | Embezzlement | Embezzlement Rate |
|---|---|---|---|---|---|
| 🇩🇪 Germany | 5,940,667 cases | 754,489 cases | 12.70% | 42,618 cases | 0.72% |
| 🇬🇧 United Kingdom | Arbitrary value: approx. 6,700,000 cases | 1,131,946 cases | Approx. 16.89% | 12,137 cases† | Approx. 0.18%† |
| 🇯🇵 Japan | Arbitrary value: approx. 860,000 cases | 46,011 cases | Approx. 5.35% | 15,795 cases | Approx. 1.84% |
Japan has a fairly balanced number of fraud and embezzlement cases, and even if we look for ways to pick apart the figures, I don’t think we could increase the numbers by very much.
So, among the six countries above, I will simply recognize Japan as the country with the lowest figure and use it as the 1× baseline country.
When I say that fraud and embezzlement are being counted in a balanced way,
you can refer back to what I said earlier about statistics being the movement of one large body of data.
I consider fraud and embezzlement to belong to the same broad category.
We can see that both South Korea and Japan have a fraud-to-embezzlement ratio of roughly three to four times.
I am defining that ratio as a reasonable level of balance.
From that perspective, the difference between Germany and the United Kingdom is unusually large.
It is dozens of times larger.
That is why I decided to investigate the United Kingdom and Germany more closely.
The thought was probably:
“Perhaps the two countries have a very broad definition of fraud,”
“or a very narrow definition of embezzlement.”
Let’s find out.
That was where we were.
So,
let’s take a look at how the United Kingdom and Germany compile their statistics.
In the United Kingdom, fraud data comes not only from police records, but also from Cifas, a private fraud-prevention organization, and UK Finance, an association representing the financial industry.
Since both organizations deal with fraud-related data,
there is little problem with using their figures together when examining the number of fraud cases.
If anything, they are adding even more cases.
Now, Germany.
The PKS is also a criminal crime statistic based on offenses identified and processed by the police.
The German PKS also explicitly states that punishable attempts are included as cases.
“Bekannt gewordener Fall ist jede im Katalog aufgeführte rechtswidrige (Straf-) Tat einschließlich der mit Strafe bedrohten Versuche, denen eine (kriminal-) polizeilich bearbeitete Anzeige zugrunde liegt.”
In other words,
both South Korea and Germany deal with criminal offenses in these statistics.
The difference, however, is that Germany also includes punishable attempts in its crime statistics.
For now,
we can already see a difference in how the cases are counted.
So let’s take a closer look at what the two countries actually consider to be fraud.
The United Kingdom
The UK’s Fraud Act 2006 defines fraud in three ways: ① fraud by false representation, ② fraud by failing to disclose information when there is a legal duty to disclose it, and ③ fraud by abuse of position.
It can constitute fraud even when no actual money or property has been taken, as long as there is an intention to gain a benefit or cause a loss—or expose someone to a risk of loss.
Rather than focusing on the bolded sections, pay particular attention to the sentence in the middle:
“even when no actual money or property has been taken.”
The three categories above are closer to basic information.
In some circumstances, deliberately failing to provide basic information properly can itself be considered fraud from the outset.
Shall we compare this with South Korea?
| Situation | 🇰🇷 South Korea | 🇬🇧 United Kingdom |
|---|---|---|
| Lying to someone | By itself, this is not fraud | If it is a dishonest false representation and there is an intention to gain a benefit or cause a loss or risk of loss, it may constitute Fraud |
| The other person believes the lie | A mistake caused by deception is required | Whether the other person actually believed the lie does not necessarily determine the outcome; if the legal requirements are met, it may constitute Fraud |
| Actually obtaining money or property | A key requirement for establishing fraud | Fraud may be established |
| Actual financial loss occurs | Important for establishing fraud | Fraud may be established |
| No actual loss, but a risk of loss is created | Difficult to establish as ordinary fraud | Fraud may be established |
| The other person realizes the lie and does not give the money | Generally difficult to establish as a completed fraud offense | If the other requirements are met, Fraud may be established |
| Simple preparation for fraud | Not fraud | Not Fraud |
| Key difference | Deception → Mistake → Disposition of property → Obtaining a financial benefit | Dishonest conduct + intention to obtain a benefit or cause a loss or risk of loss |
Exactly. Even providing false basic information can be considered fraud.
So let’s apply this to a real-life situation to make it easier to understand.
A submits false income documents to a bank and attempts to obtain a loan for personal gain.
The bank immediately discovers the deception, so not a single cent of the loan is actually paid out.
In South Korea, this could constitute attempted fraud.
After all, the person has already gone beyond the stage of simply preparing the documents without submitting them.
But in the United Kingdom, this is where the fraud offense can already begin.
The principle of “you’re only a victim if you were stupid enough to fall for it” does not apply here.
Now it becomes easier to understand why the number of fraud cases in the UK is so high.
When the definition of fraud is this broad, it also becomes understandable why the UK goes beyond simply referring to data from the private fraud-prevention organization Cifas and the private financial industry association UK Finance, and incorporates their data into the overall number of fraud cases.
Personally, I think it is difficult to simply lump the UK and South Korea together and compare them based solely on their respective numbers of fraud cases.
By my standards, they are almost like using the same title to describe two different things.
There is even more to look at when you examine the detailed table showing what each country considers fraud, but since this article is already getting too long, let’s move directly on to Germany.
Germany’s definition of fraud is similar to that of South Korea.
Germany does not consider simply deceiving someone to be fraud. Rather, fraud occurs when the deception causes damage to another person’s property and the offender seeks to obtain an unlawful financial benefit for themselves or a third party.
Unlike the UK, it does not start with:
“Oh? You were trying to deceive someone? You’re guilty of fraud.”
But when you think of Germany, what image comes to mind?
Something rigid and precise.
If this is this, then it is this. If that is that, then it is that.
You might get the impression that everything follows strict rules and principles, right?
German engineering precision did not come out of nowhere.
And then comes the moment when we see that this is not merely an impression.
Believe it or not, riding public transportation without paying for a ticket falls within the category of fraud.
Yes.
It falls under the concept of deceiving someone, causing another person a financial loss, and obtaining a financial benefit for yourself.
And then there is something even more surprising.
If you fill up your car with fuel and drive away without paying, that can also constitute fraud.
Same principle, right?
You deceive someone + cause another person a financial loss + obtain a financial benefit for yourself.
In fact, in this case, there is even a separate offense specifically associated with it.
Tankbetrug — fuel fraud.
South Korea would probably also be able to treat driving away without paying for fuel as fraud in certain circumstances.
But in Korea, you might not realize that what you did constituted fraud until you actually find yourself standing in court.
And Germany, like the UK, also has cases where the offense can be established based on the intention itself.
A special form of fraud, §265b Credit Fraud (Kreditbetrug), is one such example.
This provision applies specifically to businesses and companies.
| German Offense | Applicable To | Structure Allowing Punishment Without Actual Financial Loss |
|---|---|---|
| Credit Fraud §265b | Limited to cases involving obtaining credit for businesses or companies | Yes — The act of submitting false or incomplete financial information can itself be punishable; actual disbursement of a loan or actual financial loss is not required |
Personally, I actually like this aspect of Germany even more.
After all, when it comes to borrowing tens of billions or even hundreds of billions of won—and in some cases even more—
it is ultimately businesses that are taking out those loans.
So, shall we now break down the definitions of fraud in the three countries?
South Korea 🇰🇷
Deceiving someone → actually obtaining their property
Germany 🇩🇪
Deceiving someone → causing financial loss to another person → obtaining an unjust benefit for oneself
United Kingdom 🇬🇧
Through dishonest conduct → seeking to obtain a benefit for oneself or another → or intending to cause a loss or risk of loss to another person
What do you think?
Can you feel the difference, even a little, in how these three countries classify and deal with fraud as a criminal offense?
Fraud and embezzlement are not crimes that cause direct physical harm in the way that assault or robbery can.
However, the financial damage they cause should by no means be considered insignificant.
In some cases, the damage can go beyond financially devastating an entire household and can even spread to family members and people around the victim.
That is why I believe fraud is a crime that governments should take seriously in terms of prevention and enforcement.
Of course, that does not mean that someone should automatically receive a severe sentence simply because they committed fraud.
At least, not in South Korea.
Otherwise, there would be quite a few people we would not be seeing for a while.
There needs to be a reasonable sentencing framework based on factors such as the severity of the crime, the scale of the damage, and the method used to commit the offense.
One approach could be to define fraud broadly, as the UK does, in order to raise public awareness and encourage greater caution.
Another approach could be to carefully distinguish the scope of criminal offenses through detailed legal provisions, as Germany does, and apply those standards consistently once they have been established.
Rather than declaring that one approach is necessarily the correct answer, I think there is value in examining how each country views fraud as a crime and where each draws the line for criminal punishment.
Finally, I will leave you with a table showing the rates of fraud and embezzlement per 100,000 people in each country, along with the sentences that can vary depending on the amount of money involved in the fraud.
I’ll see you again in the next article.
| Country | Fraud Cases | Fraud per 100,000 | Fraud vs. Japan | Embezzlement Cases | Embezzlement per 100,000 | Embezzlement vs. Japan |
|---|---|---|---|---|---|---|
| 🇯🇵 Japan | 46,011 cases | 37.0 cases | 1.00× | 15,795 cases | 12.7 cases | 1.00× |
| 🇰🇷 South Korea | 347,901 cases | 672.3 cases | 18.19× | 64,810 cases | 125.2 cases | 9.86× |
| 🇩🇪 Germany | 754,489 cases | 892.4 cases | 24.15× | 42,618 cases | 50.3 cases | 3.96× |
| 🇬🇧 United Kingdom | 1,131,946 cases | 1,648.1 cases | 44.60× | 12,137 cases | 17.8 cases | 1.40× |
| Fraud-to-Embezzlement Ratio | |
| JP Japan | Approx. 2.9 : 1 |
| KR South Korea | Approx. 5.4 : 1 |
| DE Germany | Approx. 17.7 : 1 |
| GB United Kingdom | Approx. 93.2 : 1 |
In other words, for every approximately 3 cases of fraud in Japan, there is 1 case of embezzlement; in South Korea, about 1 case for every 5.4 fraud cases; in Germany, about 1 case for every 17.7 fraud cases; and in the United Kingdom, about 1 case for every 93.2 fraud cases.
Sentencing Guidelines for Fraud in South Korea by Amount of Loss
| Fraud Gain Amount | Standard Sentencing Range | Aggravated Range |
|---|---|---|
| Less than KRW 100 million | 6 months – 1 year 6 months | 1 year – 2 years 6 months |
| KRW 100 million – less than KRW 500 million | 1 – 4 years | 2 years 6 months – 6 years |
| KRW 500 million – less than KRW 5 billion | 3 – 6 years | 4 – 8 years |
| KRW 5 billion – less than KRW 30 billion | 5 – 9 years | 6 – 11 years |
| KRW 30 billion or more | 6 – 11 years | 8 – 17 years |
