2. B

Attorney D (Korean National Assembly for Defendant B)

【Criminal Power】

On January 16, 2014, Defendant A was sentenced to three and a half years imprisonment with prison labor for a violation of the Act on the Regulation of Fraud and Similar Receiving Act at the Seoul Central District Court on January 10, 2013, and the said judgment became final and conclusive on January 16, 2014. Defendant B was sentenced to two years of imprisonment with prison labor at the Seoul Central District Court on October 28, 2013 due to a violation of the Act on the Regulation of Fraud and Similar Receiving Act, and the said judgment became final and conclusive on October 28, 2013.

【Criminal Facts】

From May 10, 2010 to December 3, 2012, Defendant A, a representative director of the Victim E Co., Ltd. (hereinafter referred to as “E”), who runs an investment advisory business, etc., has overall control over the affairs such as the conclusion of investment contracts, investment including stocks, and fund management. Defendant B, a director of the above E from August 18, 2010 to December 3, 2012, was engaged in the affairs such as investor consultation, fund management, and execution.

From April 22, 2011, the Defendants received investment funds from investors in E office located in the Seocho-gu Seoul Metropolitan Government F Building in the E office, and deposited money in the E-name bank account (Account Number G) for the victim company. On April 25, 2011, the Defendants transferred KRW 2 million from the above account to the new bank account (Account Number H) in the name of the Defendant B, and then arbitrarily used them as entertainment expenses, etc. from the Gangnam National Assembly around that time.

From April 22, 2011 to November 30, 2012, Defendants voluntarily used KRW 848,523,773 among the money deposited in the victim company account 116 times in total as shown in the crime list as shown in attached Table 1.

Accordingly, the Defendants conspired and embezzled the property of the victim company.

Summary of Evidence

1. Defendant B’s legal statement, Defendant A’s partial legal statement

1. Each legal statement of the witness I and B (limited to the defendant A);

1. Each statement made by the prosecutor's interrogation protocol Nos. 2 and 3 of the defendant A (including the part concerning the defendant B's interrogation protocol in the second time) and the second prosecutor's interrogation protocol of the defendant B (including the part concerning the defendant A and I's interrogation protocol)

1. Statement of a copy of the protocol of suspect by the police against J; and

1. Investigation report (attaching details of operating expenses of the E company);

1. A copy of each judgment, a detailed statement of embezzlement, funds flow, etc. (limited to the accused B), a detailed statement of transactions, etc., a corporate register, a detailed statement of transactions, etc., and E corporation expenditure

1. Previous records: Relevant criminal records, search and output of each consolidated case, and search of integrated cases (A);

Application of Statutes

1. Article applicable to criminal facts;

Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 356, 355 (1), and 30 (General Provisions) of the Criminal Act

2. Handling and mitigation of concurrent crimes;

The latter part of Article 37, Articles 39(1) and 55(1)3 of the Criminal Act (the principle of equity with the case where the judgment stated in the first head of each judgment becomes final and conclusive, and simultaneously with the case of a violation of the Act on the Regulation of Temporary Collection of Stocks)

3. Discretionary mitigation;

Articles 53 and 55(1)3 of each Criminal Code (The following favorable circumstances shall be considered for the reasons for sentencing):

Defendant A’s assertion and judgment

1. Defendant B’s assertion of sole criminal conduct

Defendant A asserts that the amount stated in the facts charged is transferred to Defendant B’s account at the request of Defendant B to collect the capital to establish a discretionary investment company. Defendant B voluntarily consumed the whole or considerable part of the said amount as entertainment expenses, etc., and Defendant A does not bear any responsibility for such transfer.

However, the following facts and circumstances acknowledged by the evidence adopted earlier, i.e., ① Defendant B stated that the amount transferred from the investigation stage to the Defendant B’s account consistently from the investigation stage to the present court is merely an inappropriate amount for the accounting purpose if the amount transferred from the account to the employee of the employee of the entertainment business through his own account, according to the order of Defendant A who decided that the amount of entertainment expenses would be transferred to the employee of the entertainment business under the pretext of large amount of entertainment business would be inappropriate for the accounting purpose. The above statement is also unfavorable to the Defendant B, and there is no motive to receive criminal punishment until he made a false statement because he made a false statement that he would be unfavorable for the Defendant B, and the Defendant A partially recognized the above facts. In light of the above, it appears that the above statement of the Defendant B was reliable, ② it appears that the Defendants did not confirm whether the amount transferred to the Defendant B account was well kept. ③ In light of the timing when the Defendants failed to make an investment in securities and when the amount transferred, the amount transferred to the Defendant’s account in collusion with the victim’s intent to the above account.

Therefore, Defendant A’s above assertion is rejected.

2. Claims to the effect that part of them have been used for legitimate purposes;

A. The assertion

Of the funds transferred to the account in the name of Defendant B, the insurance premium (around 4.8 million won per month) purchased insurance through L in the ratio of KRW 100 million per investment amount raised by K and I in charge of E business, ② the lease deposit and lease fee of vehicles in the name of a corporation, ③ the repayment of the funds borrowed from M, N, etc. with the funds in the name of Defendant AO E, ④ the funds transferred to M, N, etc. in the name of entertainment expenses used within the reasonable scope, and the funds transferred to the Defendants for E, this part cannot be deemed to have been embezzled.

B. The premise for the determination

(1) The prosecutor must prove that there was an act of embezzlement as an act of realizing the intent of unlawful acquisition. The proof should be based on strict evidence with probative value that leads to a judge to have no reasonable doubt, and if there is no such evidence, even if there is doubt of guilt against the defendant, the interest of the defendant should be determined. However, even if there is no money which the defendant had been entrusted to hold in custody, it can be presumed that there is insufficient evidence to support the fact that the defendant used in the place of use claimed by the defendant, such as not explaining the location or place of use, or disclosing funds used in the place of use claimed by the defendant are appropriated for other funds. Rather, there is a lack of evidence to support the fact that the defendant used in the place of use for personal purposes.

(2) Furthermore, in order to punish entertainment expenses incurred in the course of the company’s operation as embezzlement or breach of trust, it should be proven that the company spent expenses for personal interests without relation to the company’s business or spent excessive and excessive expenses beyond a reasonable scope (see Supreme Court Decision 2008Do9410, Jan. 15, 2009).

(c) judgment;

In full view of the following facts and circumstances admitted by the aforementioned evidence, the majority of the funds transferred from the E account to Defendant B’s account is deemed to have been used for the benefit of the Defendants’ individual interests, and thus, Defendant A’s above assertion is rejected.

(1) Defendant A purchased an insurance policy under the name of Defendant A, Defendant A’s wife 0, and Dong-J, etc., and paid some insurance premium from the account under the name of Defendant B from the account under the name of Defendant B in proportion to the amount held by Defendant A and K. Although each of the above insurance contracts was concluded to promote E’s business, it ultimately reverts to Defendant A’s interest.

(2) On October 15, 2010, Defendant A’s new bank account from Defendant A to Defendant B’s account was charged with KRW 230,000,000 of the lease deposit for the vehicle that was transferred from BW to Defendant B’s account. Defendant B stated that most of the lease charges that were paid every month at the time the prosecutor’s office was investigated was paid from the corporate account.

(3) In the investigation stage, Defendant A borrowed money from his relatives such as M and N to this court, not from the name of the company, but from the name of the Defendant’s individual. Thus, even if Defendant A used the borrowed money for the purpose of E, the said obligation is merely the obligation of Defendant A, not the obligation of Defendant A, but the obligation of Defendant A.

(4) ① The Defendants used approximately KRW 7-80 billion in the face value of entertainment expenses in high-class entertainment bars, along with the land managers, for about two years and six months in which they operated E. However, most investors of E are invited by most I or K and their families, and the actual investors attracting I or K did not appear. ③ The Defendants could not attract investments since April 201. Furthermore, considering these facts, considering E’s size, work, financial status, and relationship with the attraction of investment, it cannot be deemed that the above disbursement of entertainment expense in the face of entertainment expense was made excessively beyond a reasonable scope, and thus, it cannot be deemed that it was made for E.

Reasons for sentencing

1. The scope of applicable sentences recognized by law: Imprisonment with prison labor for each of nine months to seven years and six months;

2. Scope of sentence recommended according to the sentencing criteria; and

Since each criminal record entered in the judgment of the defendant and the crime of this case are concurrent crimes under the latter part of Article 37 of the Criminal Act, the sentencing criteria shall not apply.

3. Determination of sentence: Defendant A-a year of imprisonment; Defendant B-a period of 10 months of imprisonment did not reach the amount of damage caused by the crime of embezzlement of this case; damage was borne by a large number of good investors; the Defendants, as the representative director or director, had a duty to have properly managed the investment of investors; however, considering that the Defendants used considerable amount of money as one of their own money to make an investment as a entertainment expense, a strict punishment against the Defendants is inevitable.

However, Defendant A had no record of crime before committing the instant crime, and Defendant B shall take into account the favorable circumstances in favor of the Defendants, such as the confession of all the instant crimes, and the facts that they are against each other, as well as the circumstances shown in the instant pleadings, such as the status, age, character and conduct, environment, motive and progress of the instant crime, and circumstances after the commission of the crime. In full view of the aforementioned circumstances, the punishment shall be determined by taking into account the equity between the cases where the judgment was rendered simultaneously with the judgment on the record of the instant crime

The acquittal portion

1. Summary of the facts charged

As indicated in the facts of the crime, the Defendants received investments from investors and transferred 880,000 won from the new bank P account under the name of Defendant A to the H account of Defendant B for the victim company. On August 24, 2010, the Defendants conspired to use 64 times in total as shown in the list of crimes, such as voluntary use of entertainment expenses, etc. from Seoul Gangnamwon to 11, 30,012 during the period from August 24, 2010 to August 24, 2010 to 64 times in the same manner as indicated in the list of crimes. The Defendants conspired to use 589,297,667 won among the money of the victim company, which was kept in the new bank account under the name of Defendant A (hereinafter referred to as “A account”) and Q (hereinafter referred to as “A account”). The Defendants embezzled and embezzled the property of the victim company.

2. Determination

A. As a matter of principle, since money is transferred along with the possession, it is reasonable to view that if the money is transferred from embezzlement to another person’s account, if the money is transferred to another person’s account, it shall be deemed that all of the money in the account would be owned by the holder of the title of the account, except in exceptional cases where it is evident that it would be objectively distinguished from other money, etc. (see Supreme Court Decision 2012Do6157, Aug. 30, 2012). Therefore, in order to recognize that the transfer of money stored in the account under A as the substance of the facts charged in the foregoing case to the Defendant Company as embezzlement against the embezzlement of the company, all of the money deposited in the account must be recognized that A was actually a company’s account, or that it is obvious that the money held in the account would be distinguished from other money, etc. because it is specified as E, and that the money was deposited in the account under

B. According to the records of this case, Defendant A asserts that from April 201, he borrowed a large amount of money from his father, relatives and descendants and received it from the above account and used it for the company operation funds, and that the above borrowed money was the Defendant Party A’s debt, not from his own debt. Defendant B and the complainant stated that Defendant A received it from his own partner and used part of it for the company’s investment or operation expenses, and Defendant A’s salary appears to have been transferred from the account since August 201, 201. In light of this, Defendant A’s account seems to have been mixed without any distinction between not only the money transferred from the account by Defendant A to a third party, but also the money received from a third party as personal loan or payment. Therefore, Defendant B and the complainant cannot be deemed to have been owned by E, but also the money transferred from the account from the E account.

3. Conclusion

Thus, since this part of the facts charged constitutes a case where there is no proof of facts of crime, it should be pronounced not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act, but as long as it is found guilty of a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)

Judges Yang Sung-tae

Judges Shin Young-ju