On May 28, 2013, the Defendant was sentenced to ten months of imprisonment for fraud at the Seoul Central District Court, and the judgment became final and conclusive on October 8, 2013.

The fact is that C Company D, a vice president, requested Company E to permit the opening of the franchise store using the trade name of “E”, but in Co. E, Ltd., the company: (a) was unclear whether the “Co. D” was capable of operating the franchise store; (b) requested Company D to verify whether the “Co. D” was capable of managing the franchise store by operating at least three franchise stores in the place of business and generating profits therefrom; and (c) expressed that D was required to pay approximately KRW 200 million deposit in order to use E, and there was no authority to recruit franchise store using the trade name of “E”.

Nevertheless, the Defendant and C agreed that “Co. D” had the authority to recruit franchise stores from “E” as if they were definitely granted the authority to recruit franchise stores and perform construction works, and receive money as a performance guarantee for construction works. On November 201, 201, at the Gangnam-gu Seoul Metropolitan Government F Building Office, C took place as if the said “Co. D”, the vice president of which he/she had the business right from “G” from “E,” and the Defendant plans to open 20 sales franchises of “G” with the victim H’s KRW 30,000,000,000,000,000 won as performance guarantee for construction work, and then, he/she took over KRW 20,000,000 from the said H’s account and received KRW 30,000,000,000 from “G” from “E,” and he/she plans to open the victim H with the victim H’s “D’s business right.