Guaranteed-Return Investment Fraud: Recovery of Investment Funds Through Tort Liability Claim

Client Information

Individual / Plaintiff
 

Case Details

The client invested KRW 10 million in an online marketplace consignment operation business after being told that a fixed return would be guaranteed for each investment unit.

The contract expressly provided that the full investment amount would be refunded if the promised returns were not paid. In practice, however, the promised returns were not properly paid, and the client received no meaningful response despite requesting a refund.

Upon reviewing the business structure, it became clear that the business was operated by randomly collecting large numbers of products and relying on the sale of only a small portion of them by chance. The business also lacked sufficient underlying capital. In other words, stable payment of guaranteed returns had been structurally unrealistic from the outset.

During the lawsuit, the defendant denied personal liability by arguing that the contracting party was not the defendant personally, but a corporate entity. The defendant also claimed that more than KRW 7 million should be deducted from the investment amount, citing alleged profits, credit card payment costs, office expenses, outsourcing fees, and other costs.

DECENT Law Firm structured the claim not as a simple breach of contract, but as a tort claim under Article 750 of the Korean Civil Act.

This approach was important because a tort claim focuses on who actually committed the deceptive conduct, regardless of whose name appeared on the contract. It also allowed DECENT to challenge the defendant’s attempt to deduct broad business-related expenses from the amount recoverable by the client.

To prove the claim, DECENT demonstrated through the contract, message records, and business proposal materials that the business structure itself was incapable of generating the promised stable returns. DECENT also proved that the defendant personally handled refund-related communications with the client and received the investment funds indirectly through a third-party account. These facts supported the position that the defendant personally engaged in the deceptive conduct.

DECENT further disputed each of the defendant’s proposed deductions, arguing that the claimed costs did not constitute benefits received by the client as a result of the defendant’s wrongful conduct.