Revenue from motel used for prostitution counts as criminal proceeds, top court rules
A landlord who bought a motel knowingly collected revenue from the operator of the motel business, which served as a venue for prostitution.
A prostitution business uncovered by Incheon police in July 2023. The photo is unrelated to the case in this article.
INCHEON METROPOLITAN POLICE AGENCY
Revenue knowingly collected by a landlord from a motel operator who used the building as a venue for prostitution counts as criminal proceeds subject to forfeiture, the Supreme Court ruled on June 24, which was reported Thursday.
The court overturned an appeals court ruling that had removed a forfeiture order of 232.7 million won ($164,000) while leaving in place a one-year prison sentence suspended for two years. The case has been remanded to the Seoul Central District Court, which will reconsider the forfeiture order.
The landlord bought the motel in Gwanak District, southern Seoul, in 2017 and took over an existing lease with the operator. Authorities later ordered the business closed over the prostitution services.
Through that order and other sanctions, the landlord learned the tenant was supplying women to motel guests who asked for them.
The tenant's spouse told the landlord in June 2019 that a lease could not be signed in the tenant's name, and the landlord signed a monthly contract with the spouse instead. The revenue ran between 5 million won and 9.5 million won a month.
Prosecutors charged the landlord with arranging prostitution by knowingly providing the premises from July 2019 through October 2022.
Under the Act on the Punishment of Arrangement of Commercial Sex Acts, money or other property obtained through such an offense is subject to forfeiture, and the central issue at trial was whether the revenue qualified.
The trial court found that it did. It handed down a suspended sentence and the forfeiture of the full revenue collected over the period in question.
The appeals court upheld the suspended sentence and removed the forfeiture order.
"Because a motel is a lodging business, it serves both ordinary guests and customers seeking prostitution," the appeals court said. "It is difficult to treat all of the revenue as criminal proceeds from arranging prostitution. The criminal proceeds subject to forfeiture cannot be specifically identified."
The Supreme Court rejected that reasoning.
"What is subject to forfeiture in this case is not the operator's profits from renting out rooms at the motel, but the revenue [the landlord] received in return for providing the land and building," the Supreme Court said. "The fact that the room charges paid by ordinary guests cannot be specifically identified does not, by itself, preclude the forfeiture."
BY JO SU-BIN [cho.yongjun1@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
