In cases where the deposit account opened by the account holder used to commit a telecommunications-based financial fraud and the victim wired or transferred the amount of fraudulent damage to the account, whether embezzlement is established against the victim if the account holder withdraws the amount with the intent to obtain the said money (affirmative), and in such case, whether the account holder constitutes a separate crime of embezzlement in addition to fraud (negative)

Articles 30, 32, 347, and 355(1) of the Criminal Act

Supreme Court en banc Decision 2017Do17494 Decided July 19, 2018 (Gong2018Ha, 1801)

Defendant

Prosecutor

Attorney Cha Jong-hwan

Incheon District Court Decision 2017No3742 Decided December 8, 2017

The non-guilty part of the judgment below shall be reversed, and that part of the case shall be remanded to the Incheon District Court Panel Division.

The grounds of appeal are examined.

1. Where the deposit account opened by the account holder used in the telecommunications-based financial fraud crime and the victim wired or transferred the amount of fraudulent damage to the account, the account holder should be deemed to be in the position of keeping the amount of fraudulent damage for the victim. If the account holder withdraws the money with the intent to obtain it, then the crime of embezzlement against the victim is established. If the account holder withdraws the money with the intent to obtain it, it is only the result of the crime he/she participated in, and there is no consignment relationship with the victim. Even if the account holder withdraws the money wired or transferred, it cannot be deemed as infringing on new legal interests because it is merely the act of the commission of the fraud that he/she committed, and thus, it does not constitute a separate crime of embezzlement (see Supreme Court en banc Decision 2017Do17494, Jul. 19, 2018).

2. Of the facts charged in this case, the summary of embezzlement is as follows: (a) around 13:30 on May 26, 2016, the Defendant deposited KRW 5,500,00 in the new bank account in the name of the Defendant (around 26, 2016, the Defendant loaned KRW 3,500,000 to a new bank account in the name of the Defendant (a loan made by the Defendant after receiving a proposal from his name-free purchaser that he would lend the passbook) while keeping KRW 5,50,000, around 14:00 on May 26, 2016, the Defendant withdrawn KRW 4,791,000 from the said account eight times through cash withdrawal machines; and (b) around that time, he embezzled KRW 9,000 from the convenience store by settling with the check card connected to the said account.

In regard to this, the lower court upheld the first instance judgment that acquitted the Defendant of this part of the facts charged on the ground that it is difficult to view such withdrawal act as constituting a separate embezzlement against the said victim, and that there is no other evidence to prove a consignment relationship or a fiduciary relationship between the said victim and the said victim on the ground that the funds of the defrauded were deposited in the account in the name of the Defendant. Moreover, even if the Defendant withdrawn cash from the account used in the subsequent fraud, such act is merely merely an act included in the act of the commission of the fraud committed, and it is difficult to view that such act constitutes an infringement on the new principal right (ownership).

3. However, in light of the legal principles as seen earlier, in a case where the Defendant merely transferred the means of access to one’s own account without knowledge that it would be used for the commission of fraud, and it does not constitute an accomplice, the victim’s act of fraud in the name-based crime constitutes a custody relationship under the good faith principle with the Defendant as to the money transferred to the said account and deposited, and thus, the Defendant’s act of voluntarily withdrawing it constitutes embezzlement.

Therefore, the lower court should have deliberated on whether the Defendant was aware of the fact that the means of access was used for the crime of fraud at the time of the transfer of the means of access as above and determined whether this part of the facts charged constitutes embezzlement.

Nevertheless, solely on the grounds indicated in its reasoning, the lower court determined that this part of the facts charged did not constitute embezzlement. In so doing, it erred by misapprehending the legal doctrine on embezzlement, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on this point is

4. Therefore, the non-guilty part of the judgment below is reversed, and that part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jae-hyung (Presiding Justice)