Violation of the Act on Regulation of Conducting Fund-Raising Business without Permission

Attorney BI

A defendant shall be punished by imprisonment for two years.

Of the facts charged in the instant case, the charge of fraud against the victim AK is acquitted.

A. misunderstanding of facts or misunderstanding of legal principles

Of the facts charged in the instant case, each money listed in 1, 2, 4, and 9 Nos. 1, 2, 4, and 9 of the attached Table 2 of the judgment of the court below can be deemed as money owned by the victim D in light of its substance. Since the victim D transferred the money to AK to the defendant by the victim D, the act of disposal of the victim D is recognized. Nevertheless, the court below acquitted this part of the facts charged for the reasons stated in its judgment. The court below erred by misapprehending the facts or by misapprehending the legal principles, which affected the conclusion of the judgment.

B. Unreasonable sentencing

The punishment sentenced by the court below (two years and six months of imprisonment, and three years of suspended execution) is too unhued and unfair.

2. Ex officio determination

The prosecutor, at the time of the trial, by deceiving the victim D and soliciting its members as stated in the "criminal facts added by the defendant" as stated below, with regard to the fraud of the victim D, and thereafter, the prosecutor, from October 15, 2013 to October 12, 4, 2013, as stated in the attached list of crimes, shall receive transfer of KRW 172 million over eight times, such as in the attached list of crimes, and shall acquire it by fraud from the victim D on October 18, 2013, and shall take the transfer of KRW 30 million from the victim D to the effect that the above part of the judgment of the court below was modified and thus no longer maintained. Furthermore, the revised part of the charges should be found guilty, and the remaining part of the charges should be reversed as the judgment below found in the first sentence of Article 37(1) of the Criminal Act.

On the other hand, the prosecutor's argument of mistake of facts or misapprehension of legal principles on this part is about the existing facts charged, and as long as the facts charged are changed by permitting amendments to indictment as above in the trial court, it is not judged separately the legitimacy of the above argument, and then, it is judged as to the changed facts in

3. Conclusion

The judgment of the court below is reversed in accordance with Article 364 (2) of the Criminal Procedure Act without examining the prosecutor's argument on the grounds of ex officio reversal, and the judgment below is again ruled as follows.

【Grounds for the Judgment of the Supreme Court】

Criminal facts and summary of evidence

The summary of the facts constituting the crime and the evidence recognized by this court is added to the summary of the facts constituting the crime and the evidence as follows, and it is admitted as it is in accordance with Article 369 of the Criminal Procedure Act, except that the court below's 's 'the 'the 'the 'the 'the 'the 'the 'the 'the '' of the 'the 'the 'the '' of the 'the 'the 'the 'the 'the 'the 'the ' of the 'the ' the 'the 'the 'the 'the ' of

○ Additional criminal facts

[2015Gohap55]

1. On October 2013, the Defendant: (a) at the E Farming Association Office located in Suwon-si, Suwon-si; (b) at the E Farming Association Office, the Defendant took a huge benefit in operating the said E Farming Association; and (c) upon investing money to the Defendant, the Defendant heard 6% of the principal amount every 15 days to the victim D, who found the Defendant, paid 6% of the principal amount as interest; and (d) borrowed money as the construction cost is required to build a Han-do Factory. In the form of a fraternity, the Defendant made a false statement that 6% of interest would be paid every 15 days if he/she lends money.

However, in fact, the Defendant established an EF association of KRW 900 million invested in September 201, but purchased a building and site to be used for a livestock product processing plant on October 8, 2012 due to a shortage of funds from the bank and the branch, and failed to appropriately raise the cost of construction works up to KRW 2.4 billion, and the Defendant failed to pay the principal and interest borrowed from the bank on July 2013, and the said factory building and site were in imminent situation due to the failure to pay the loan borrowed from the bank. Therefore, the Defendant did not have any intent or ability to pay the loan even if it borrowed money from the victim D or the fraternity in the form of money investment.

A victim D, along with AK, recruited members to invest in E Farming Partnership projects, such as Victim AL, BK, AP, AM, N, BL, and AO. On October 15, 2013, the Defendant received transfer of KRW 10 million to the Si bank account in the name of the Defendant from the victim AL who was paid guidance money on October 15, 2013 through the victim D, the Defendant received transfer of KRW 10 million from around that time to December 4, 2013, and acquired the money by transfer of KRW 160 million in total eight times, such as the List of Crimes (excluding KRW 12 million remitted by Victim AK in the first half of the second half of the year).

2. On October 18, 2013, the Defendant, at the above EF’s office, received money from the said EF office from the victim D, but did not have the intent or ability to repay the money. However, the Defendant acquired money from the victim D through AK, a leading state of KRW 100 million, out of KRW 100,000,000,000, from among the KRW 100,000,000,000, which is KRW 30,000,000, from the victim D, through AK, a leading state.

○ Summary of additional evidence

[2015Gohap55]

1. Each legal statement of the trial court and the witness D of the original trial;

1. The original witness AK's partial statement in court

1. Partial statement of the suspect interrogation protocol of the accused by the prosecution;

1. Fact-finding certificates, receipts, promissory notes, notarial deeds, application forms for membership into associations, certificates of revenue amount of the value-added tax-free business, standard balance sheets, standard income statements, investigation reports (a filing of all the articles and items certificates, including articles and items related to

Application of Statutes

1. Article relevant to the facts constituting an offense and the selection of punishment;

Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 13719, Jan. 6, 2016); Article 347(1) of the Criminal Act ( comprehensively including frauds against victim G), Article 347(1) of the Criminal Act (hereinafter referred to as "victim L, N, W, B, K, AP, AP, AM,N, BL, AO, and D); Article 6(1) and Article 3 of the Act on the Regulation of Similar Receiving Act ( comprehensively referring to imprisonment), Article 347(1) of the Criminal Act

1. Aggravation for concurrent crimes;

Article 37 (former part of Article 37, Article 38 (1) 2, and Article 50 of the Criminal Act shall be aggravated for concurrent crimes with punishment prescribed by the Act on the Punishment, etc. of Specific Economic Crimes (Fraud) with the largest penalty

1. Discretionary mitigation;

Articles 53 and 55(1)3 of the Criminal Act (The following consideration for the reasons for sentencing):

The defendant and defense counsel's assertion and judgment

1. Summary of the assertion

AL, BK, AP, AM,N, BL, AO, and D are decided to make an investment by their own will, so the defendant could not be said to have deceiving the victims.

2. Determination

In full view of the following circumstances recognized by the lower court and the first instance court’s evidence duly investigated and adopted, it is reasonable to view that the Defendant, even if having borrowed money from the victims in the form of money investment, did not have the intent or ability to repay it, the Defendant, either directly or through AK or AD, by deceiving the victims, and by receiving the remittance of KRW 160 million in total from them. The Defendant’s assertion is without merit.

① The victim D had been solicited from AK to make an investment in the Defendant, and the Defendant, around October 2013, required the construction fund to build a “Korea-do stable factory” to the victim D, who found the office of the EF association office. When lending money, the Defendant stated that the Defendant would pay 6% interest every 15 days in the form of a fraternity. The Defendant explained that the Defendant could reduce the amount agreed upon by directly taking a lawsuit at the slaughter factory to the victim D, who was holding the reason for lowering the high interest rate, by directly taking the lawsuit at the slaughter factory.

② However, at the time of the Defendant’s private business chain AC’s sales revenue amounting to approximately KRW 2.4 billion in year 2012, but at around KRW 2.7 billion in year 2013, E agricultural partnership sales revenue amounting to approximately KRW 5.6 billion in year 2012, but at around KRW 3.1 billion in year 2013 (Evidence No. 4-3, 201, 215, 220), the Defendant purchased the building and the land to be used for the construction of a livestock product processing plant with loans from a corporate bank on October 8, 2012, the Defendant purchased the building and the land to be used for the construction of a livestock product processing plant, but the Defendant did not voluntarily decide to commence the auction on October 18, 2013 (Evidence No. 4-39 of the Record No. 539 of the Evidence), and even if the Defendant’s financial situation was very good at the time, the Defendant did not make a statement to the victim at bar (the victim).

③ The injured party D, along with AK, recruited more than 10 members, including AL, BK, AP, AM,N, BL, and AO, and collected more than 20 million won once every 15 days, and operated a system in which the injured party D invested in the Defendant and the Defendant received interest every 15 days (hereinafter referred to as “instant system”). The purpose of the instant system is to invest in the Defendant as a gold that is received differently from a general system having the character of promoting friendship.

The victim AO made a statement that he had visited the E Farming Partnership factory after being aware of the purpose of the instant fraternity (the victim AO's legal statement in the lower court), and the victim AM made a statement to the effect that she was solicited to join the instant fraternity at the E Farming Association office by two female members (AK and the victim D) (the victim's legal statement in the lower court), and that 'AP made an investment of KRW 20 million on November 4, 2013, and 'AP made an investment of KRW 20 million in the E Farming Association membership' (Evidence 4-3 of the evidence record).

In light of these circumstances, it is consistent with the empirical rule to view that the victims, who cannot clearly identify the circumstances leading to the accession to the instant system, such as victim AL, BK, AP,N, and BL, may receive 6% interest for every 15 days from the defendant, K, or victim D, etc.

④ The Defendant appears to have spent part of the amount invested through the instant system to pay the operating expenses of the personal company run by the Defendant, and the Defendant stated that the Defendant was unaware of the remaining place of use of the investment funds (Evidence Nos. 4-3 and 293, evidence records). Considering that the Defendant continued to decrease the sales of the company run at the time, and that the Defendant had to pay the outstanding amount to many creditors other than the victims, the Defendant would have been trying to use the funds invested as the funds for the Corporation to pay the existing amount of debt.

Reasons for sentencing

The circumstances favorable to ○: The Defendant appears to have committed the instant crime by partially recognizing the instant crime. The Defendant appears to have committed the instant crime in the course of raising funds while not showing that the victims were deceiving with a conclusive intent, but appears to have caused the instant crime. Some of the victims of the instant criminal facts (G, L, N, W, WT, UNFCCC, AM, and D) agreed with the victim of the instant criminal facts.

○○ Unfavorable Circumstances: The instant crime was committed by paying a high rate of up to 12% per month and attracting investment. In particular, the instant crime committed by the Defendant in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and each of the instant crimes committed by obtaining money exceeding KRW 1.2 billion against the victims, and the quality of the crime is not good. The Defendant has the record of two fines due to the same crime and one-time suspension of execution. The Defendant was sentenced to a punishment of two years under the suspended execution for eight months on April 19, 2010 (U.S. District Court Decision 2009Da5716, Apr. 27, 2010). However, even though the above judgment became final and conclusive on April 27, 2010, some of the instant crimes were committed during the suspended execution period (in particular, during the most similar receiving acts during the suspended execution period, the Defendant paid the entire amount of damage to the victims, but still did not reach an agreement on the victim.

○ The conditions of the present sentencing and sentencing indicated in the present case’s arguments and records, including the Defendant’s age, character and conduct, intelligence, environment, motive, means, results, and circumstances after the crime, including such favorable circumstances and unfavorable circumstances, and the sentencing guidelines of the Sentencing Committee shall be determined as ordered by the Supreme Court.

The acquittal portion

1. Summary of the facts charged

Of the facts charged in the instant case, the summary of the fraud with the victim AK is that the Defendant, on October 15, 2013, obtained a transfer of KRW 12 million from the victim AK to the City Bank Account in the name of the Defendant, by means of money investment.

2. Determination

In full view of the following circumstances recognized by the lower court and the first instance court’s duly admitted and adopted evidence, it is insufficient to readily conclude that AK, only with the evidence submitted by the prosecutor, was deceiving the Defendant from the Defendant, remitted KRW 12 million to the Defendant, and there is no other evidence to prove otherwise.

① From September 13, 2013 to December 15, 2013, K invested an aggregate of KRW 500 million to the Defendant. On January 8, 2014, K completed the registration of establishment of a maximum debt amount of KRW 600 million based on the contract for establishing a contract as of October 11, 2013 with respect to the land and building located in the EM owned by the E farming association corporation.

② AK invested KRW 4-50 million to the victim D, and set up a security of KRW 600 million to the Defendant’s property. It appears that AK actively participated in inducing the Defendant to make an investment in the victim D, etc. and organizing the 200 million foot mold so that it can make an investment (D’s original statement and the trial court’s statement).

③ At the lower court’s trial, K made a statement to the effect that, while suffering from damage from the Defendant in relation to the instant system, the Defendant was entitled to receive money from the victim D, as the Defendant did not include only one source of money. In addition, AK also made a statement to the effect that it is not a civil or criminal liability for the victim D, the subject of the instant system, and did not make any explicit assertion from the Defendant that the victim D, who was the subject of the instant system, arbitrarily used the instant system, was subject to criminal liability, and that the Defendant was deceiving. The Defendant stated that there was no possibility to file a civil or criminal lawsuit against the Defendant, not only for claims not recovered from the Defendant.

④ The Defendant stated that “If the slaughter factory to be newly built is finished, the Defendant would bring the corporation’s interest in the company’s director and the subsequent shares in the company divided into certain parts.” However, the Defendant did not put the other members of the company (Evidence No. 4-3, 596 pages).

⑤ In light of these circumstances, it is sufficient to view that AK invested KRW 500,000 in the business of the Defendant and E farming association or at least invested KRW 500,00 for the purpose of distributing profits from the business and actively recruited members, such as victims D. Therefore, the evidence submitted by the prosecutor alone cannot be deemed that this part of the facts charged is proven without reasonable doubt.

3. Conclusion

Therefore, this part of the facts charged constitutes a case where there is no proof of crime, and thus, a judgment of innocence is rendered under the latter part of Article 325 of the Criminal Procedure Act, but the purport of the public notice of acquittal is not pronounced.

It is so decided as per Disposition for the above reasons.

Judge Shin Jae-ok

Judge Kim Young-hoon