2017Gohap506 Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

A

Magwons (prosecutions) and Prosecutorials (Public Trial)

Han Law Firm Hann Law Firm

Attorney Go-hee, Attorneys Go-hee, Park Han-ok

Law Firm LLC (LLC)

Attorney Doh-tae, Counsel for the plaintiff-appellant

January 25, 2018

The accused shall notify publicly the summary of the judgment of innocence.

1. Summary of the facts charged in this case

The defendant is the representative director of the corporation B (hereinafter referred to as the "B") established with the main purpose of the drama, film, and musical production business.

On September 5, 2016, the defendant extended a loan of KRW 2 billion to D's executive director at the office of Gangnam-gu Seoul building and victim D (hereinafter referred to as "D") and victim E (hereinafter referred to as "victim E (hereinafter referred to as "victim E") in the 9th floor around September 5, 2016, because there is a lack of funds to prepare for musical performances (hereinafter referred to as "G performances") and to pay the principal six months after the interest of 20% per annum. ② It is intended to transfer the right to claim the payment of the sales proceeds of G performance tickets as security to the company, the sales agent, and the victim E (hereinafter referred to as "H") without prior written consent. ③ It is important to cancel or modify the terms and conditions of the loan without prior written consent.

However, in fact, the Defendant: (a) at the time, the Defendant had no other property; (b) B had sales in KRW 15.6 billion in the year 2014; (c) but in the year 2015, the sales amount was reduced to KRW 9.4 billion due to the failure of “public performance due to the depression of the performance community and the Marman situation; and (d) the net income was equivalent to KRW 67 billion in the amount of net income; and (b) on September 30, 2016, the amount was equivalent to KRW 27.6 billion in the net income for KRW 5.5 billion in the sales amount as of September 30, 2016; (c) however, as the monthly interest on loans or the operating expenses of the company, the amount of

In light of the fact that there was a debt worth of KRW 3 billion, approximately KRW 3 billion, KRW 3 billion, KRW 6 billion, KRW 3 billion, and KRW 3 billion, KRW 200 billion, KRW KRW 464.5 billion, KRW 69.4 billion, and KRW 69.4 billion, KRW 1 billion, but there was no money in advance, KRW 5.5% of the shares of KRW 2 billion, after borrowing from the victim company, and KRW 5.5 billion, KRW 5 billion, around November 17, 2016, KRW 2000, KRW 5.5 billion, and KRW 5.00,000, KRW 500,000,000, KRW 5.000,000,000,000,000,000,000,000,000,000,000,000,000,00,00.

Accordingly, the Defendant, by deceiving F in such a way as above, received a total of KRW 2 billion from the victim company to the Nbank account in the name of B on September 5, 2016, respectively. 2. The gist of the Defendant and the defense counsel’s assertion

A. Summary of claims related to intent and capacity to repay;

1) At the time of entering into a loan agreement with B on September 5, 2016 (hereinafter “instant loan agreement”), the victim company was well aware of the fact that the financial situation of B through F in advance is not sufficiently sufficient at the time of entering into the loan agreement with B (hereinafter “instant loan agreement”). Nevertheless, the victim company considered B’s musical production capacity, performance record, etc., and conducted the loan of KRW 2 billion in B (hereinafter “instant loan”) under the judgment that it is possible to secure sufficient security to receive the claim for sales proceeds of G performance, after examining the victim company’s musical production capacity, performance record, etc., and then, the victim company conducted the loan of KRW 2 billion in B (hereinafter “instant loan”) under the judgment that it is possible to secure adequate security to receive the claim for sales proceeds of G performance. The instant loan was sufficiently possible to repay the sales proceeds if the sales ratio of G performance exceeds 30%, and in light of the past sales performance of other public performances in the past.

2) At the time of the conclusion of the instant loan agreement, the Defendant jointly and severally guaranteed the obligation to repay the principal and interest of loan. At the time, the Defendant held 40% of the shares B in his own name and 60% of the remaining 60% of the shares in the name of the borrower, and only the B shares owned in his name were worth significantly exceeding the instant loan. Accordingly, the Defendant was able to personally repay the instant loan.

3) The reason why G performance was revoked is not due to the fact that the J was not able to pay rent, but due to the fact that the Defendant was unable to find a precedent. In other words, the Defendant’s failure to repay the instant loan was due to the fact that the Defendant was forced to cancel the performance due to the fact that the instant ticket was sold in an unexpected way, and the Defendant had both intent and ability to repay at the time of concluding the instant loan agreement.

B. Summary of the assertion regarding fraud

1) At the time of the instant loan, F was paying attention only to secure collateral by taking over B’s musical production ability and sales proceeds of tweet tickets sales claims at the time of the instant loan, and there was no significant interest in the source of the loan, and it did not have a significant meaning as to the relevant provision of the contract at the time of entering into the instant loan agreement. In other words, the instant loan agreement was entered into with awareness that the use limitation provisions stated in the instant loan agreement are formal and the F may use some of the loans for other purposes, and thus, the Defendant did not deceiving F.

2) Since the musical performance project is a structure that prepares a series of performances in parallel while proceeding with a variety of performances, where some of them are used for the production cost of other performances even if they receive a loan or an investment on the premise of a specific performance production, which was the practice of the musical community industry known to all. The Defendant used some of the loans of this case as the production cost of other musical communities according to the practices of such musical community industry, and thus, the Defendant cannot be recognized as the intent of fraud.

C. Summary of the assertion related to the cancellation of performance

At the time of cancelling G performance, the Defendant stated F as to whether to cancel the performance or not, and finally decided to cancel the performance with the consent of F. As long as the performance was canceled with the consent of F, there is no problem to cancel the performance, even if there is no written consent of the victim company.

3. Determination

A. Determination on the defendant's intent and ability to repay

In full view of the following facts and circumstances acknowledged by the evidence duly adopted and examined by the court, the defendant does not seem to belong to the victim by making a false statement about the financial situation of B at the time of the execution of the loan of this case or about the possibility of repayment of loan through G performance, etc., and the defendant himself/herself had considerable financial ability to repay the loan of this case through G performance, and it appears that he/she prepared for G performance with intent to pay the loan of this case. The victim company also appears to have implemented the loan of this case under the judgment that the principal and interest can be recovered from the sales proceeds of G performance after sufficiently grasping the financial situation of B, etc., and there seems to have been no significant interest in the general financial ability or financial situation of B. The evidence submitted by the prosecutor alone is insufficient to recognize that the defendant was paid the loan of this case by deceiving or the victim without the intent or ability of the defendant to repay, and there is no other evidence to acknowledge this otherwise.

1) Prior to the conclusion of the instant loan agreement, the Defendant sent F the financial situation of B and the musical production ability, etc. to F through the P through the brokerage of the instant loan agreement, and the F seems to have sufficiently grasped the financial situation of B, etc. through this process. In addition, the F verified that “B’s financial statements, etc. while the loan examination was conducted, and confirmed that B was a large amount of debt,” but the performance in the past shows that “B did not have any problem in recovering the loan of this case at the 30 to 40% roadway. At the time of the instant loan implementation, the Defendant did not focus on the general financial situation or credit rating, etc. of B.” In light of these circumstances, the Defendant appears to have sufficiently explained the financial situation of B at the time of the instant loan implementation, and the F or the victim companies did not appear to have been able to have sufficiently explained to F on the financial situation of B and the possibility of taking over the loan through the performance and the sale price of G’s bonds through the performance and the sale price of the public performance.

2) B transferred a claim for sales proceeds of G performance pockets to the victim company as a security for the instant loan. If the ratio of sales proceeds of G performance pockets exceeds 30 to 40%, it is possible for the victim company to recover all principal and interest of loan proceeds from the sales proceeds of G performance pockets. In light of the ratio of sales proceeds of public performance held in the past, the ratio of 30 to 40% is deemed to have been sufficiently achieved. Furthermore, B concluded a license contract for G public performance prior to the conclusion of the instant loan agreement, and entered into a printing contract with a well-known music. Furthermore, B appears to have continuously prepared for G public performance while paying considerable expenses. In light of the fact that there exists a reasonable ground to view that the repayment of the instant loan is possible with the sales proceeds of G public performance pockets, and that the Defendant has endeavored to actually engage in the performance of G public performance, it is difficult to deem that the Defendant did not have any intent to repay the instant loan at the time of concluding the instant loan agreement.

3) Meanwhile, B entered into a rental agreement with Q Co., Ltd. (hereinafter “ Q”) on December 8, 2015 and B from March 22, 2016 to January 16, 2017 to Q Co., Ltd. to hold three musical works, such as “O,K,” and “R,” and thereafter, the third performance author finally changed the rent into “G.” The rent contract was set at KRW 1,921,70,000 (including additional rent) and the rent was set at KRW 1,60,00,000 for KRW 1,921,70,000 and paid KRW 1,60,000 for KRW 20,000,000 from October 19, 2016 to KRW 200,000,000 for the rent for rent of KRW 360,000,000,000 for Q Q from March 26, 2016.

However, in the past, B has accumulated a considerable trust relationship with Q while performing a large number of musical works in J. Accordingly, Q appears to have had the intention to look at the time schedule for the payment of rent, etc. in consideration of the circumstances of B, and ② B continued consultation on the rental issue of Q and J despite notice of termination of the contract on October 14, 2016, B offered Q as security the L 10 billion won of the claim amount to Q as security on October 21, 2016, and agreed to maintain the rental contract on October 24, 2016 under the condition that B transferred 16.5% of the sales proceeds of G public performance ticket sales proceeds in question to H, and ③ Any revocation of G was an inevitable measure due to public performance book creation.

In light of the fact that the rent unpaid under the above rental contract remains, and Q has been holding consultations with B for the rental of musical performances in the year 2017 even in the circumstances where the unpaid rent under the above rental contract remains, the above J rental problem does not seem to have an essential obstacle to the progress of the G performance, and it is difficult to view that the Defendant received the instant loan from the victim company without the intent and ability to repay, based on such circumstance.

4) The Defendant appears to have held 40% of the shares B in the name of the Defendant and 60% of the remaining 60% of the shares in the name of a third party. As long as the Defendant owns assets equivalent to 42,000 shares of B, the part of the facts charged in the instant case that the Defendant did not have assets of the Defendant at the time of the conclusion of the instant loan agreement is inconsistent with the aforementioned objective facts.

Furthermore, S acquired L from April 2016 to had a plan to take over B again through L. Accordingly, L was requested to assess the value of B stocks 42,000 shares to T Accounting Corporation on June 2016, 201, and T Accounting Corporation considered that the value of B stocks 42,000 shares should be calculated from KRW 8,380,00 to KRW 11,673,00,000 when applying the cash flow method. Since S’s L acquisition was without any separate acquisition, it seems that it was difficult for the Defendant to have concluded the instant loan agreement to take over the loan amount of KRW 23,105,00,00,00 from the end of September 17, 2016.

B. Determination as to the fraud of use

In full view of the following facts acknowledged by the evidence duly adopted and examined by this court and the circumstances that can be inferred therefrom, the victim company and F, recognizing that the Defendant could use the instant loan for the purpose other than the purpose of the G performance, appears to have performed the instant loan under a certain understanding, and it is difficult to view that the Defendant had the intent to commit fraud in light of the practices of the musical industry related thereto.

The evidence presented by the prosecutor alone is difficult to view the defendant as belonging to the victim company or F in relation to the purpose of the loan of this case, and there is no other evidence to acknowledge this differently.

1) Article 2 of the loan agreement of this case provides that "the borrower shall use the loan borrowed from the lender under this agreement only for the purpose of production, performance, financial expenses, etc. for the musical performance of this case, and the borrower shall fully assume the responsibility of the borrower for all matters arising from the use of the loan for purposes other than the above purpose." According to the above provision, there is room to view that the purpose of the loan of this case is limited to G performance.

However, in light of the fact that the title of the above provision is "the purpose of the loan" and is located at the bottom of the loan agreement of this case, the above provision appears to be "the purpose of the loan of this case" rather than "the purpose of the loan of this case", and ② The above provision provides that the purpose of the loan of this case is defined as "the production cost, performance cost, and financial expenses for public performance", and it is comprehensively defined as if the loan of this case can be used for all expenses directly or indirectly related to the public performance of G, and it does not vary with the specific items or scope of the loan of this case. ③ In the latter part of the above provision, it is possible for the borrower to use the loan of this case for the purpose other than the above purpose. Considering that it is possible for the borrower to use the loan of this case for other purpose under B's responsibility, the above provision can be interpreted as the specific purpose of the loan of this case, which is only the regulation of the public performance of this case.

2) In the event that a lender pays a loan to a borrower’s account without any separate measure while carrying out a loan for a specific project, it may be easily predicted that the loan can be used for any purpose other than that of the loan by mixing it with other funds of the borrower, and the victim company or F, which is an investment expert, may have been well aware of such circumstances. Furthermore, it seems that a lender who intends to restrict the use of a loan, opens a separate joint account or manages and supervises the withdrawal, etc. of the loan by designating a separate project expenditure account, is generally used, and in relation to cultural and art projects, it is widely used to establish a company engaged in cultural industries as a special purpose company so that the loan or investment is not used for any purpose other than that of the loan.

However, the victim company and the F paid all of the instant loans to the general account B while carrying out the instant loan, and did not take any separate measures to manage the location of the instant loan use. In addition, considering the following factors: (a) at the time of entering into the instant loan agreement, F appears to have not specifically mentioned the restriction on the use of the instant loan; (b) victim company and F paid attention only to whether G performance can be normally carried out; (c) the sales proceeds of G performance can be recovered; and (d) the detailed use of the instant loan seems to have no other interest in the instant loan; and (c) as seen earlier, Article 2 of the instant loan agreement cannot be seen as a provision to strictly limit the detailed use of the instant loan; (b) the victim company or F recognizes that the instant loan can be used for some other purposes; and (c) if the instant loan was properly used and the instant loan was normally carried out, it appears that the victim company and F would not have given implied understanding that the instant loan would have been implemented.

Therefore, even though the Defendant thought to use part of the instant loans from the beginning to the beginning in connection with performance other than G performance, but did not notify the victim company of such intent, if the Defendant’s act is impossible to hold a public performance or there is no serious obstacle to the progress of the public performance, it is difficult to view that the Defendant’s act constitutes an act of deceiving the victim as it is within the scope of implied understanding by the victim company. Moreover, even though the Defendant suffered a little financial shortage, it appears that the progress of G public performance was possible, and there is no evidence suggesting that the Defendant had a serious obstacle to the progress of the public performance by using the instant loans for other purposes.

3) The musical performance project is a structure that prepares a series of performances in parallel, and accordingly, even if a musical producing company receives an investment for a specific performance, it has frequently been used for other performances that are being prepared at the time of the implementation of the investment. Aside from the case where the execution of the investment is desirable, it seems that the diversion of the investment was the practice of the musical industry, as well as that of the case where investors are aware of the circumstances or practices of such performance industry and understand them.

On the other hand, the loan of this case was executed in P as the intermediary, and most communication and opinion formation rates between B and the victim companies at the time of the conclusion of the instant loan agreement were conducted through P. However, on August 31, 2016, the transfer of the loan of this case, B had already agreed to repay the above KRW 500 million with the loan of this case when the loan of this case was executed by borrowing KRW 500 million from P without interest. As such, the Defendant seems to have thought that the circumstance that part of the loan of this case is expected to be used for the purpose of the repayment of the existing loan was delivered to the victim through P as a matter of course. If there are factual relations and circumstances, it is difficult to view that the Defendant had the intent to commit fraud since the Defendant had already known that the victim had already used the loan of this case for any purpose other than the performance of G, and considering that it had already been used for the purpose other than the performance of public performance.

C. Other judgment on deception

1) Determination on the assignment of the claim for sales proceeds of diskettes

The charged facts of this case include false statement that "The defendant would transfer the right to claim the payment of the sales price of the G performance pockets to the agent in order to directly receive the sales price of G performance pockets as security for the loan of this case from H, etc." to F at the time of entering into the loan agreement of this case.

However, at the same time as the instant loan agreement was concluded, the Defendant entered into an agreement on the assignment of claims for the sales proceeds of G performance diskettes sales proceeds with the victim Company B within the limit of 2.2 billion won, and no evidence was found to suspect the validity or authenticity of the said agreement on the assignment of claims on the record. Thus, in relation to the assignment of claims for the sales proceeds of tex tickets, the Defendant cannot be deemed to have made a false statement to F or the victim company.

2) Determination on the part regarding prior written consent

Article 10(1)3 of the loan agreement of this case provides that "the borrower shall not cancel any contract that is concluded or entered into in connection with the musical performance of this case without the prior written consent of the lender, or shall not modify the important contents, or shall not waive, transfer, transfer or dispose of the borrower's rights, transfer or transfer of the other party, or transfer or take other measures." Furthermore, the facts charged of this case include the fact that the defendant made a false statement to F as to the aforementioned pre-written consent, and it seems to be the purpose of the above fact that the defendant did not obtain the victim's prior written consent at the time of the cancellation of the G performance.

However, the Defendant appears to have sufficiently consulted with F at the time of cancelling G performance and cancelled G performance with F’s consent. In addition, considering the fact that at the time of the commencement of G performance, the Defendant had to immediately determine whether to cancel the performance, and that F did not demand consent in writing at the time, it is difficult to deem that the Defendant violated the duty prescribed in the said provision even if the Defendant did not obtain prior written consent from the victim company.

Above all, in the event that the Defendant’s performance at the time of the instant loan is revoked in the future, there is no idea to obtain prior written consent from the victim company, but there is no evidence to see that the Defendant belonged to the victim by entering into the instant loan agreement with the intent to conceal these circumstances. Thus, the Defendant’s revocation of the G performance without prior written consent cannot be deemed to have belonged to the victim company.

D. Sub-determination

Ultimately, the F and P investigative agency’s statements and F’s legal statements that seem to correspond to the facts charged in the instant case are inconsistent with objective evidence and lack of credibility and lack of evidence to support the facts charged. The remainder of the evidence submitted by the prosecutor alone is insufficient to recognize the fact that the Defendant, at the time of receiving the instant loan from the victim company, deceiving or deceiving the victim company regarding the use of the instant loan, repayment intent and ability, etc., and there is no other evidence to acknowledge otherwise.

4. Conclusion

Thus, the facts charged in this case constitute a case where there is no proof of facts constituting a crime, and thus, a not-guilty verdict is rendered pursuant to the latter part of Article 325 of the Criminal Procedure Act, and a summary of this judgment is publicly announced pursuant

The presiding judge, judge Kim Jong-tae

Judges Kim Gin-han

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