2. B

Attorney F in charge

Law Firm AC (Defendant B)

Attorney in charge AD

A. misunderstanding of facts and misapprehension of legal principles

1) Defendant A

From the additional collection amount of the lower court, the sum of the server costs paid to Defendant B, a stock company (hereinafter referred to as “T”) operated by Defendant B, and the amount refunded to customers, shall be deducted from the sum of KRW 150 million.

2) Defendant BI

A) The sales amount of W during the instant crime period (from November 18, 2014 to May 14, 2015) includes KRW 530,403,710, and KRW 563,539,100 in the sales amount of I, and KRW 148,060 in the sales amount of W. Thus, the total sales amount of KRW 1 and W during the instant crime period includes KRW 945,82,810 in the sales amount of W, and the criminal proceeds of Defendant B from the instant crime shall not exceed KRW 945,882,810 in the sales amount of W.

B) Of KRW 167,581,334, which was deposited in Defendant B’s personal account (EE) during the period of the instant crime, the sum of KRW 114,60,234, which is not related to the instant criminal proceeds (the number 67,87,107, 114, 116, 117, 118, 121, 126, 128, 129, 129, 139, 140, 143, 146, 148, 149, 151), shall be deducted from the criminal proceeds to be collected from the said Defendant.

C) The amount refunded to Defendant B during the period of the instant crime, namely, KRW 17,649,00, KRW 140,734,530, and KRW 131,94,00, KRW 530 after May 14, 2015, namely, KRW 131,94,00, and KRW 58,272,318 shall be deducted from the criminal proceeds to be collected from the said Defendant.

D) Since 10% of W’s turnover was paid to AF and N, W’s KRW 106,080,742 equivalent to 20% of W’s turnover of the crime period of this case shall be deducted from the criminal proceeds to be collected as a penalty from the above Defendant.

E) The above Defendant remitted criminal proceeds to the Z or U account established by AG, and received a tax invoice from AG, and withdrawn 13% of the money deposited into the Z or U account and paid to AG out of 13% of the money deposited into the Z or U account. During the criminal period of the instant crime, I is KRW 324,54,00,00, the sum of the amount remitted from W to the Z or U account. As such, 42,190,720 won equivalent to 13% of the amount should be deducted from the criminal proceeds to be collected from the said Defendant.

F) Of the sales during the 1st period of the instant crime period, the part that was disbursed as expenses, such as employee benefits, should be deducted from the criminal proceeds to be collected from the said Defendant.

B. Unreasonable sentencing

The sentence of the lower court (Defendant A: imprisonment of one year and six months, three years of suspended execution, three years of additional collection, 321,702,483 won, and Defendant B: imprisonment of two years of suspended execution, three years of suspended execution, confiscation, additional collection 1,267, 179, 729 won) is too unreasonable.

A. Relevant legal principles

The purpose of collection under Articles 8 through 10 of the Act on Regulation and Punishment of Criminal Proceeds Concealment is to deprive the criminal of unlawful profits and prevent them from possessing them (see, e.g., Supreme Court Decision 2007Do2451, Jun. 14, 2007). Thus, where several persons jointly gain profits from a crime, only the amount distributed, i.e., the amount actually accrued, shall be confiscated and collected (see, e.g., Supreme Court Decision 2009Do13912, Jan. 28, 2010). In addition, in collecting criminal proceeds, the expenses disbursed by the criminal to obtain criminal proceeds, even if they have been disbursed from the criminal proceeds, they shall not be deducted from the criminal proceeds that should not be consumed (see, e.g., Supreme Court Decision 2005Do7146, Jun. 29, 2006).

B. Defendant A

1) When Defendant A operates an Internet advertising company called Q, he received a fee of KRW 60,00 from the client to connect the client and the Defendant B, and paid KRW 4-50,000 to the Defendant B by directly sealing to the server (AH) account purchased by Defendant B, or when the client wants to purchase the account, he received KRW 50,550,000 from the client and paid KRW 30,3330,000 from the client to the Defendant B and received KRW 50,000,000 from the client and delivered the ID and password to the client. Considering the method of these crimes, the server costs paid by Defendant A to Defendant B may be assessed to have shared the criminal proceeds that the Defendants acquired. Thus, the criminal proceeds to be collected from Defendant A should be collected additionally.

We examine the specific amount to be deducted. The above defendant's defense counsel presented the statement of account transactions by asserting that it was paid as server expenses on May 12, 2016. According to the statement of transactions, the amount transferred from the defendant Eul to the defendant Eul is a multiple of 30,000 won, and as seen above, the defendant A paid KRW 30,330,000 to the defendant Eul as server expenses. Thus, during the crime period of this case, it can be deemed that all of the details of transactions were paid as server expenses. Accordingly, from 91,839,00 won, the defendant transferred from the account under the same name to the defendant Eul's account during the crime period less KRW 2,92,000,000 which was transferred from the defendant's account under the same name to the defendant Eul's account. Furthermore, according to the transaction details of the defendant's national bank account (E), it appears that the defendant Gap received the above amount of KRW 300,300,000,000 from the defendant.

2) The amount refunded by Defendant A during the period of the instant crime ought to be deducted from the criminal proceeds to be collected (see, e.g., Supreme Court Decision 2014Do4708, Jul. 10, 2014). The said Defendant’s defense counsel submitted the data on the amount of refund on June 24, 2015 at the lower court, and the aggregate amount is KRW 32,857,567.

3) Thus, the amount to be collected from Defendant A is KRW 169,957,916, which deducts the amount to be collected from Defendant A’s total sales amount of KRW 321,702,483 from KRW 88,847,00,00, and KRW 30,040,00, and refunded amount of KRW 32,857,567 during the criminal period of the instant crime. Defendant B is the amount to be collected from Defendant B.

1) During the period of the instant crime, the Prosecutor: (a) calculated 1,267,179,729 won as criminal proceeds in total based on all the details of deposits deemed to be related to the instant crime on the basis of the entries in the statement; and (b) collected the above amount as a penalty by the Prosecutor; and (c) the lower court additionally collected all the above amount. However, if there is any details of transactions between each account, the equivalent amount is overlapping with criminal proceeds; and (d) there is no possibility that the transaction details irrelevant to the instant crime will be included in criminal proceeds. Accordingly, the amount should be calculated first, and the amount should be calculated as a penalty by deducting the refund amount and the amount distributed to accomplices.

Based on the tax invoice submitted by the above defendant, when calculating the sales amount for the crime period of this case, W. 563,539,100 won, W. 530,403,710 won was included in W. The above sales amount includes KRW 148,060,000 (the details of remitting KRW 148,720,000 from W during the same period are confirmed), the remaining amount calculated by subtracting KRW 148,060,00 from KRW 563,539,100 from KRW 148,00 shall be considered as I’s sales amount. In addition, during the crime period of this case, during the statement of reasons for appeal, Defendant A remitted the above amount of KRW 30,040,00 to the national bank account under the name of the defendant B (E) and the amount of KRW 148,000 should be considered as the national bank account under the name of the above defendant 136,000,000 won.

Thus, the sum of the sales during the crime period of this case by Defendant B is KRW 1,113,464,14 (=563,539,100 + KRW 530,40,710 + KRW 167,581,334 - 148,000 + KRW 148,60,000), from the amount deposited into the national bank account (AE) in Defendant B’s name, the sum of KRW 114,660,234 of the amount claimed by Defendant B as unrelated to the crime of this case is deducted (the part claimed by the Defendant as unrelated to the crime of this case is deemed to be a transaction unrelated to the crime of this case, while it is not clear what name it is deposited, there is no part that the Defendant’s interest is determined).

3) The sales revenue and W as examined in the above Paragraph 1 above are already deducted from the amount refunded to the customer during the period of the instant crime (see 1 and W sales tax invoice submitted by his defense counsel on April 28, 2016). Therefore, only the amount refunded after May 14, 2015 among the part on which the said Defendant asserted a deduction on the ground that the refund was made, namely, the amount refunded after May 14, 2015, i.e., KRW 31,94,00 in relation I, i.e., KRW 58,272,318 in relation to W.

4) According to evidence, AF’s director, around June 2014, asked N to take charge of I’s advertising business after registering as a personal business operator, and NF started to run the I’s advertising business under the name of “V” after receiving the proposal. AF changed the name of “V” to N around October 2014, and requested N to manage the overall marketing business of NF by moving its office to its office. Upon accepting the proposal above, N changed its trade name in W around October 2014 and managed all advertising companies managed by Defendant B at the I’s office, and it is recognized that N would have agreed to receive 10% of the sales amount between NF and Defendant B. 10% of the sales amount from “N” to “N” 10% of the sales amount from “NF” to “N” 30% of the sales amount from the crime of this case. Considering the aforementioned facts, the amount calculated by dividing the sales amount of NF’s sales amount from “N” to “N” 30% of the sales revenue of this case.

5) At the court of first instance, AG made an investment in the Defendant’s business in the court of first instance, and stated that “The amount transferred to the U.S. account is 13% of the amount transferred to the Defendant’s business.” However, the Defendant did not fully refer to the fact that the Defendant received an investment from AG while undergoing several investigations at an investigative agency, and there was no submission of an investment agreement between the said Defendant and AG.

Therefore, it is difficult to believe the above statement of AG as it is. As Defendant B stated in the prosecution, Defendant B was issued a tax invoice from AG after remitting the criminal proceeds of this case to the Z Co., Ltd. established by AG for the purpose of paying tax less amount, and 13% of the amount remitted to each of the above accounts is determined to have been paid in return for using the corporate account established by AG as above and issuing the tax invoice from the said corporation. Thus, Defendant B merely appears to have participated in managing or concealing the criminal proceeds after the completion of each of the crimes committed by Defendant B, and it cannot be deemed that the said amount paid to AG was distributed the criminal proceeds among the accomplices. Accordingly, the said amount is not deducted from the criminal proceeds to be collected.

6) The amount used as employee’s benefits or operating costs of I is not deducted because it is only a method of consuming criminal proceeds.

7) If so, the amount to be collected from Defendant B is KRW 114,660,234, which is a sum of KRW 1,13,464,14,140, which is not related to the instant crime, and KRW 31,94,00, which was refunded after May 14, 2015, and KRW 58,272,318, which was distributed to AF, and N, KRW 802,50,742, which was deducted from KRW 106,50,742.

D. Sub-committee

The defendants' assertion as to collection of additional collection is justified within the above scope, and the judgment of the court below which sentenced additional collection differently from the above amount is erroneous in the misapprehension of legal principles as to additional collection and thereby affecting the conclusion

3. Determination on the Defendants’ assertion of unfair sentencing

In full view of the fact that the profits earned by the Defendants as a result of the instant crime is a crime planned and closely, and that the nature of the crime is extremely poor in consideration of the intelligence and professional criminal law, as well as the Defendants’ proper reasoning in the lower court, it appears that not only the duties of Internet portal operators were obstructed due to the instant crime, but also the Internet users accessing erroneous information were suffering from the injury of the type of crime, and that there was no change in sentencing conditions compared with the lower court’s judgment, the lower court’s punishment cannot be deemed to have been excessively exceeded the reasonable scope of discretion.

4. Conclusion

Therefore, since the part of the defendants' appeal is partly reasonable, under Article 364 (6) of the Criminal Procedure Act, the part of the judgment of the court below concerning the collection of penalty is reversed under Article 10 (1) and Article 10 (1) and Article 8 (1) of the Act on Regulation and Punishment of Criminal Proceeds Concealment shall be additionally collected from the defendant A pursuant to Article 169, 957, 916, and 802,50 won from the defendant B, and the remaining appeal by the defendants is without merit. Thus, it is so decided as per Disposition by the assent of all participating Justices.

Judges Ho Sung-ho

Judges Gyeong-dong

The counsel’s opinion was submitted. If there is a difference in the contents written in each document, the contents written in the recent written document will be finally state.

shall be deemed to have been filed.

2) In the grounds of appeal, the Defendant’s defense counsel remitted 50% of the amount of sales in W to Defendant B, which is substantially reverted to Defendant B.

Since it cannot be viewed as a profit, 267,020,295 won, which is 50% of W’s sales amount of the crime period of this case 534,040,591 won, from the criminal proceeds to be collected as a penalty.

Although the defense counsel’s opinion submitted on April 28, 2016 submitted on April 28, 2016, “ contrary to the aforementioned assertion,” in W during the crime period.

The actual amount calculated by deducting the above amount from the I’s sales amount of KRW 563,539,100, alleging that the sum of the sent amount is KRW 148,720,000.

Each of the above contents is difficult to be compatible with each other, and the legal counsel’s opinion on April 28, 2016, as stated in Section 1 of the above note.

It is considered that the statement is finally asserted.