July 2025
Taiwan Supreme Court Grand Chamber Clarifies Criminal Proceeds Require Actual Gains and Confession Allows Sentence Reduction Even Without Obtaining Proceeds
On May 14, 2024, the Criminal Grand Chamber of the Supreme Court rendered its 113-Tai-Shang-Da-Zi-4096 ruling, providing a unified interpretation regarding the scope of “criminal proceeds” as referred to in the forepart of Article 47 of the Fraud Crime Hazard Prevention Act (hereinafter, the “Fraud Prevention Act”). The ruling also clarified whether a defendant who has not obtained any criminal proceeds may nevertheless seek a reduction of sentence solely on the basis of having consistently confessed throughout the investigation and trial proceedings.
Case Background
In this case, the appellant (i.e., the defendant) was involved in a fraud scheme and was responsible for communicating with the victim regarding the payment. However, the payment in question was not actually received by the appellant but was instead collected by other co-perpetrators or seized by the authorities. Both the first-instance and second-instance courts convicted the appellant of fraud committed by three or more persons and imposed a mitigated sentence.
The case was appealed to the Supreme Court, which referred the following legal questions to the Criminal Grand Chamber for a unified ruling:
1. In cases involving multiple perpetrators, does the phrase “his or her criminal proceeds” in the forepart of Article 47 refer specifically to the portion of proceeds actually obtained by the individual defendant, or does it also include any property or benefits that the victim transferred as a result of the fraud, regardless of who ultimately received them?
2. If the defendant has not obtained any such proceeds, can a sentence reduction still be granted solely on the basis that the defendant consistently confessed throughout the investigation and trial, without having to voluntarily surrender any proceeds?
Relevant Provision
The forepart of Article 47 of the Fraud Prevention Act provides: “A person who commits fraud and confesses during the investigation and throughout all stages of trial, and who voluntarily surrenders his or her criminal proceeds, shall have his or her sentence reduced.”
According to the legislative intent, this sentence reduction provision serves two main purposes. First, it is intended to encourage early confessions by defendants in fraud cases, thereby helping to expedite criminal proceedings. Second, by requiring offenders to voluntarily return the proceeds they have actually obtained through fraud, it aims to improve the chances for victims to recover their financial losses. This reflects a broader criminal justice policy of encouraging truthful admissions of guilt while promoting the return of illegally obtained assets to victims.
Key Points of the Ruling
The Supreme Court’s ruling focused on two key issues:
1. Criminal proceeds are limited to property or funds actually obtained by the defendant.
The Supreme Court clarified that the phrase “his or her criminal proceeds” in the forepart of Article 47 of the Fraud Prevention Act refers to property or remuneration personally obtained, controlled, or possessed by the individual defendant as a result of the crime. It does not include the overall proceeds obtained by the fraud scheme or by the group as a whole.
Furthermore, the Court noted that most co-perpetrators in fraud cases may not have access to the financial flow of the entire fraud scheme or know the full extent of the victims’ losses. Requiring an individual defendant to surrender all proceeds from the victims would undermine the legislative purpose of this provision, which is to encourage confessions.
2. A defendant who did not obtain criminal proceeds may still seek a sentence reduction based on a consistent confession.
Even if the defendant did not actually obtain any criminal proceeds, as long as the defendant consistently confessed to the facts of the crime throughout the investigation and trial proceedings, the requirements for a sentence reduction under Article 47 of the Fraud Prevention Act are still met. In other words, if no proceeds were obtained, there would be nothing to surrender. This does not affect the defendant’s eligibility for a reduced sentence based on confession.
Conclusion and Observations
Following the announcement of this ruling, the Ministry of Justice expressed regret, stating that the outcome appears inconsistent with the legislative intent of Article 47 of the Fraud Prevention Act, which is to facilitate the return of criminal proceeds to victims. The Ministry indicated that it would consider possible amendments to prevent sentence reductions from being granted solely on the basis of a defendant’s unilateral confession, as this could lead to excessive leniency. [1]
This ruling clarifies a legal question that has been debated for many years: a consistent confession alone is sufficient to justify a reduction of sentence, regardless of whether the defendant actually obtained any criminal proceeds. While this clarification may encourage defendants to admit guilt at an earlier stage and facilitate the timely resolution of cases, the Ministry of Justice has noted that this approach effectively allows sentence reductions to depend solely on a defendant’s unilateral confession without consideration of whether the victim’s financial losses have been recovered. Such an outcome may deviate from the original legislative intent of the provision. How future legislative amendments or practical implementation will effectively realize the objectives of the Fraud Prevention Act in deterring fraud and protecting victims remains to be seen.
[1] Ministry of Justice News Release (May 14, 2025). In Response to the Supreme Court Grand Chamber Ruling, the Ministry Will Initiate Legislative Amendments to Strengthen Fraud Penalties and Enhance Victim Protection. https://www.moj.gov.tw/2204/2795/2796/242182/post (last visited: July 25, 2025).
Case Background
In this case, the appellant (i.e., the defendant) was involved in a fraud scheme and was responsible for communicating with the victim regarding the payment. However, the payment in question was not actually received by the appellant but was instead collected by other co-perpetrators or seized by the authorities. Both the first-instance and second-instance courts convicted the appellant of fraud committed by three or more persons and imposed a mitigated sentence.
The case was appealed to the Supreme Court, which referred the following legal questions to the Criminal Grand Chamber for a unified ruling:
1. In cases involving multiple perpetrators, does the phrase “his or her criminal proceeds” in the forepart of Article 47 refer specifically to the portion of proceeds actually obtained by the individual defendant, or does it also include any property or benefits that the victim transferred as a result of the fraud, regardless of who ultimately received them?
2. If the defendant has not obtained any such proceeds, can a sentence reduction still be granted solely on the basis that the defendant consistently confessed throughout the investigation and trial, without having to voluntarily surrender any proceeds?
Relevant Provision
The forepart of Article 47 of the Fraud Prevention Act provides: “A person who commits fraud and confesses during the investigation and throughout all stages of trial, and who voluntarily surrenders his or her criminal proceeds, shall have his or her sentence reduced.”
According to the legislative intent, this sentence reduction provision serves two main purposes. First, it is intended to encourage early confessions by defendants in fraud cases, thereby helping to expedite criminal proceedings. Second, by requiring offenders to voluntarily return the proceeds they have actually obtained through fraud, it aims to improve the chances for victims to recover their financial losses. This reflects a broader criminal justice policy of encouraging truthful admissions of guilt while promoting the return of illegally obtained assets to victims.
Key Points of the Ruling
The Supreme Court’s ruling focused on two key issues:
1. Criminal proceeds are limited to property or funds actually obtained by the defendant.
The Supreme Court clarified that the phrase “his or her criminal proceeds” in the forepart of Article 47 of the Fraud Prevention Act refers to property or remuneration personally obtained, controlled, or possessed by the individual defendant as a result of the crime. It does not include the overall proceeds obtained by the fraud scheme or by the group as a whole.
Furthermore, the Court noted that most co-perpetrators in fraud cases may not have access to the financial flow of the entire fraud scheme or know the full extent of the victims’ losses. Requiring an individual defendant to surrender all proceeds from the victims would undermine the legislative purpose of this provision, which is to encourage confessions.
2. A defendant who did not obtain criminal proceeds may still seek a sentence reduction based on a consistent confession.
Even if the defendant did not actually obtain any criminal proceeds, as long as the defendant consistently confessed to the facts of the crime throughout the investigation and trial proceedings, the requirements for a sentence reduction under Article 47 of the Fraud Prevention Act are still met. In other words, if no proceeds were obtained, there would be nothing to surrender. This does not affect the defendant’s eligibility for a reduced sentence based on confession.
Conclusion and Observations
Following the announcement of this ruling, the Ministry of Justice expressed regret, stating that the outcome appears inconsistent with the legislative intent of Article 47 of the Fraud Prevention Act, which is to facilitate the return of criminal proceeds to victims. The Ministry indicated that it would consider possible amendments to prevent sentence reductions from being granted solely on the basis of a defendant’s unilateral confession, as this could lead to excessive leniency. [1]
This ruling clarifies a legal question that has been debated for many years: a consistent confession alone is sufficient to justify a reduction of sentence, regardless of whether the defendant actually obtained any criminal proceeds. While this clarification may encourage defendants to admit guilt at an earlier stage and facilitate the timely resolution of cases, the Ministry of Justice has noted that this approach effectively allows sentence reductions to depend solely on a defendant’s unilateral confession without consideration of whether the victim’s financial losses have been recovered. Such an outcome may deviate from the original legislative intent of the provision. How future legislative amendments or practical implementation will effectively realize the objectives of the Fraud Prevention Act in deterring fraud and protecting victims remains to be seen.
[1] Ministry of Justice News Release (May 14, 2025). In Response to the Supreme Court Grand Chamber Ruling, the Ministry Will Initiate Legislative Amendments to Strengthen Fraud Penalties and Enhance Victim Protection. https://www.moj.gov.tw/2204/2795/2796/242182/post (last visited: July 25, 2025).
