The Supreme Court ruled that if a building owner rented out a motel to an operator while knowing it would be used for prostitution, the rental revenue must be confiscated in full.
The Supreme Court's 3rd division (presiding Justice Oh Seok-jun) said on the 13th that it overturned the lower court ruling that sentenced a person surnamed Jeong, 52, indicted for violating the Act on the Punishment of Prostitution, to one year in prison, suspended for two years, and remanded the case to the Seoul Central District Court on Jun. 24. It said it was wrong to impose only a suspended prison sentence without confiscating criminal proceeds, and because only the confiscation part cannot be reversed, it quashed the entire lower judgment and ordered the remand court to conduct a new trial.
Jeong purchased land and a building used as a motel in Gwanak-gu, Seoul, in Jun. 2017. The motel's tenant, a person surnamed A, was ordered to suspend business after brokering or providing prostitution to guests from Jan. to Apr. of the same year. When taking over the motel, Jeong succeeded to the lease contract with A. A then resumed prostitution operations and in Mar. 2018 was ordered to close the business.
In Jul. 2019, Jeong signed a one-year lease with B, A's spouse, with a deposit of 300 million won and monthly rent of 8 million won. This was because a lease contract could not be made under A's name. Then in Jan. 2021, they entered into a lease with a deposit of 250 million won and monthly rent of 5.5 million won.
Prosecutors sent Jeong to trial, saying, "While knowing the building would be provided for prostitution, the building was leased out, thereby providing a place for prostitution and brokering prostitution as a business." The Act on the Punishment of Acts of Arranging Sexual Traffic provides for up to seven years in prison or a fine of up to 70 million won for those who broker prostitution as a business. It also requires that money and goods obtained through the crime be confiscated.
In the first trial, Jeong was sentenced to one year in prison, suspended for two years, and confiscation of 232.7 million won. The first trial court said, "It is recognized that Jeong leased the land and building in this case to A while knowing they would be provided for prostitution." It viewed the 232.7 million won in rent that Jeong received from A from Jul. 2019 to Oct. 2022 as entirely criminal revenue from brokering prostitution.
The appeals court maintained Jeong's sentence but reversed the confiscation part. The appeals court said, "A, who directly operated the motel, told investigators and at the first trial that 'most were general lodging guests, and those engaging in prostitution were less than 10%,'" adding, "Jeong's confiscation amount should be limited to the portion of rent obtained from brokering prostitution."
It went on, "This motel had a mix of general guests and prostitution guests," and judged, "There are no materials to specifically calculate the criminal revenue obtained from brokering prostitution, so the criminal revenue subject to confiscation cannot be specified."
By contrast, the Supreme Court held that the full 232.7 million won in rent could be confiscated. The court said, "The object of confiscation is not the tenant's motel lodging sales amount but the amount equivalent to the rent received as consideration for providing the land and building," adding, "One cannot deny confiscation of the amount equivalent to rent merely because the lodging fees received from general guests have not been specifically identified."