[1] The purport of Article 23(2) of the former Door-to-Door Sales Act and Article 32-2 of the Enforcement Decree of the former Door-to-Door Sales Act

[2] A law applicable in cases where a violation of the above Act, which is an inclusive crime, continues before and after the enforcement of the Act on Door-to-Door Sales, Etc.

[3] Whether an act of receiving money without delay constitutes an act of receiving money where it can be deemed as a transaction of money even if it was in the form of the transaction of goods (affirmative), and whether an act of receiving money without delay under Articles 3 and 2 subparag. 1 of the Act on the Regulation of Conducting Fund-Raising Business without Permission constitutes an act of

[1] It is reasonable to view that Article 23(2) of the former Door-to-Door Sales, etc. Act (amended by Act No. 8537, Jul. 19, 2007); Article 32-2 of the former Enforcement Decree of the Door-to-Door Sales, etc. Act (amended by Presidential Decree No. 20341, Oct. 23, 2007); Article 23(2) of the former Door-to-Door Sales, etc. Act (amended by Act No. 8259, Jan. 19, 2007); and Article 23(2) of the former Door-to-Door Sales, etc. Act (amended by Act No. 8259, Jan. 19

[2] Where Article 23(2) of the Door-to-Door Sales, etc. Act (amended by Act No. 8259 of Jan. 19, 2007), which is a blanket crime, continues to be committed even after the enforcement of this Act, Article 23(2) of the Act on Door-to-Door Sales, etc. (amended by Act No. 8259 of Jan. 19, 2007, Article 3 of the Addenda to the Act on Door-to-Door Sales, etc. (amended by Act No. 8259 of Jan. 19, 207) is applicable to a blanket crime

[3] Article 3 of the Act on the Regulation of Conducting Fund-Raising Business without Permission provides that "the act of importing an investment under the agreement to pay the whole amount of the investment or an amount in excess thereof to the future" as one of the acts of fund-raising business without permission under Article 2 subparagraph 1 of the same Act. Even if the form of the transaction of goods was displayed, if it is merely a prestigating or prestigating the transaction of goods, and it can be seen as a de facto monetary transaction, it may be deemed an act of fund-raising business without permission under the same Act. In addition, the act of fund-raising under Article 3 and Article 2 subparagraph 1 of the same Act shall be established immediately by promising to pay the whole amount of the investment or an amount exceeding it in the future, and it shall

[1] Article 23(2) of the former Door-to-Door Sales, etc. Act (amended by Act No. 8537 of Jul. 19, 2007); Article 32-2 of the former Enforcement Decree of the Door-to-Door Sales, etc. Act (amended by Presidential Decree No. 20341 of Oct. 23, 2007); Article 23(2) of the former Door-to-Door Sales, etc. Act / [2] Article 23(2) of the former Door-to-Door Sales, etc. Act (amended by Act No. 8259 of Jan. 19, 2007); Article 3 of the former Door-to-Door Sales, etc. Act (amended by Act No. 8537 of Jul. 19, 2007) / [3] Article 2 subparag. 1 and Article 3 of the former Door-to-Door Sales, etc. Act

[3] Supreme Court Decision 2006Do7470 Decided January 25, 2007 (Gong2007Sang, 401) Supreme Court Decision 2007Do2144 Decided June 1, 2007, Supreme Court Decision 2007Do6241 Decided October 25, 2007

Defendant 1 and 16 others

Defendants and Prosecutor

Attorney Lee Im-soo et al.

Seoul High Court Decision 2008No3261 decided May 13, 2009

All appeals are dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the Prosecutor’s Grounds of Appeal

The intent of the crime of defraudation, which is a subjective constituent element of fraud, shall be determined by comprehensively taking into account the objective circumstances such as the financial history, environment, details and details of the crime before and after the crime, and the execution process of transaction, so long as the defendant does not make a confession. Meanwhile, the conviction should be based on evidence with probative value that leads to the conviction that the facts charged are true to the extent that there is no reasonable doubt. Therefore, if there is no such evidence, even if there is a suspicion of guilt against the defendant, it is inevitable to determine it as the benefit of the defendant, and the same applies to the recognition of the criminal intent, which is a subjective element of the crime of fraud (see Supreme Court Decision 2005Do12, Oct. 14, 2005).

According to the reasoning of the judgment below, the court below also determined that there is no evidence to acknowledge the criminal intent of acquiring capital in the name of the capital increase and of acquiring the name of attorney-at-law in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) against Defendant 1 pursuant to the above legal principles, and there is no illegality such as misunderstanding of the legal principles as to the rules of evidence as otherwise alleged in the ground of appeal. We cannot accept all of the arguments that dispute the judgment of the court below as to the remaining criminal intent of defraudation, which is the fact-finding court, and there is no illegality such as the selection of evidence and the violation of the rules of evidence that affect the judgment of the court below. The Supreme Court precedents pointed out in the ground of appeal are inappropriate

2. As to the Defendants’ grounds of appeal

A. The part concerning Defendant 1's deceitation of purchase price of merchandise coupons among the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) against Defendant 2

(1) In a case where the defendant denies the criminal intent of defraudation, the facts constituting the subjective element of the crime must be proved by the method of proving indirect or circumstantial facts having a substantial relation with the criminal intent due to the nature of things. In this case, what constitutes the indirect or circumstantial facts having a substantial relation with the criminal intent should be determined by the method of reasonably determining the connection of the facts by using the detailed observation or analysis capabilities based on normal empirical rule (see, e.g., Supreme Court Decision 2005Do8645, Feb. 23, 2006). Meanwhile, as a subjective element of the constituent element of the crime, the willful negligence as a subjective element of the crime has the awareness of the possibility of the occurrence of the crime, and further, the intention of the deliberation to allow the risk of the crime. Whether the actor permitted the possibility of the crime, not dependent on the statement of the offender, should be determined by the general public based on the specific circumstances such as the form of the act and the situation of the act, etc. that were externally expressed, and the psychological condition of the offender should be confirmed from his standpoint (see, 4.).

According to the reasoning of the judgment of the court below, the court below also seems to have recognized dolusor intention of the purchase price of gift certificates to the above defendants in accordance with the above legal principles, and there is no illegality in the misapprehension of legal principles as to the criminal intent or dolusor intention, as otherwise alleged in the ground of appeal. The remaining grounds of appeal that dispute over the judgment of the court below as to the deception, causation between deception and disposal act, the criminal intent of deception, and the scope of damage with the victim shall not be accepted, and the selection of evidence and fact-finding belonging to the judgment of the court below which is the fact-finding court, and there is no illegality in violation of the rules of evidence that affect the judgment of the court below. The Supreme Court precedents pointed out in the ground of appeal are inappropriate to

(2) A joint principal offender under Article 30 of the Criminal Act commits a crime jointly with two or more persons. In order to establish a joint principal offender, a subjective element is the intent and objective requirement for joint processing, which requires the fact of implementation of a crime through functional control based on a joint doctor. A joint principal offender’s intent should be integrated to commit a specific criminal act with a joint intent, and the intention for joint processing should be to move one’s own intent by using another person’s act (see, e.g., Supreme Court Decision 2002Do7477, Mar. 28, 2003). A joint principal offender may be held liable as a so-called joint principal offender in cases where it is deemed that a functional control exists through an essential contribution to the crime rather than a mere conspiracy, and where it is deemed that there exists a functional control through an essential contribution to the crime (see, e.g., Supreme Court Decision 2002Do7477, Apr. 26, 2007).

According to the reasoning of the judgment below, the court below also determined that Defendant 2 was a co-principal of the purchase price of gift certificates in accordance with the above legal principles, and there is no illegality of law such as misunderstanding of legal principles as to co-principal as otherwise alleged in the ground of appeal. The remainder of the grounds of appeal disputing the judgment of the court below as to the crime liability of Defendant 2 as co-principal cannot be accepted as a result of the fact-finding of evidence and the fact-finding which belong to the exclusive jurisdiction of the court below, and there is no illegality such as violation of the rules of evidence that affect the judgment

(3) Habitualness in habitual fraud refers to the nature of the actor as a habit of repeated fraud. In determining the existence of such habition, the criminal records of the fraud are important data to determine the existence of the habition. However, even if there are no criminal records of fraud, where the habition of the fraud is acknowledged in light of all the circumstances, such as the frequency of the crime, means and methods, and motives, the habitualness should be recognized (see, e.g., Supreme Court Decisions 2000Do4870, Jan. 19, 2001; 2006Do2860, Sept. 8, 2006).

According to the reasoning of the judgment of the court below, the court below also found that Defendant 3 had a habit of fraud in accordance with the above legal principles, and there is no illegality of law such as misunderstanding of legal principles as to habituality, as otherwise alleged in the ground of appeal. The remainder of the grounds of appeal disputing the judgment of the court below as to habituality of Defendant 3 cannot be accepted as a matter of course, which is the fact-finding court's intention of pointing out the selection of evidence and fact-finding which are within the exclusive jurisdiction of the court below, and there

B. The violation of the Door-to-Door Sales Act (hereinafter “Door Sales Act”)

(1) Article 23(2) of the former Enforcement Decree of the Sales Control Act (amended by Act No. 8259, Jan. 19, 207; hereinafter “former Sales Control Act”) provides that “No one shall engage in money transactions without any multi-level marketing organization or any similar trading or actual monetary transactions conducted by a multi-level marketing salesperson with any other sales business entity for the purpose of selling goods or services, such as purchase or sale of merchandise coupons.” However, Article 23(2) of the former Enforcement Decree of the Sales Control Act (amended by Act No. 8259, Jan. 19, 207; hereinafter “the former Enforcement Decree”) provides that no one shall engage in sales of goods or services at any price higher than that of a multi-level marketing salesperson for the purpose of selling goods or services, whichever is earlier than that of a multi-level marketing salesperson, without any specific multi-level marketing salesperson’s purchase or sale of goods or services.” However, the former Enforcement Decree of the Sales Control Act provides that “any sales business entity shall be deemed to be a person who actually engaged in sales of goods or services.”

For the same purpose, there is no illegality in the lower court’s judgment that applied the relevant provisions of the amended Protection Act, which was enforced at the time of the completion of the act by deeming the crime of violation of the Act as a comprehensive crime, and applied the Act retroactively to the amendment of the Act, etc.

(2) The ground of appeal disputing the judgment of the court below on the act of practically conducting only monetary transactions in disguise of the transaction of goods, etc. is not accepted as a fact-finding court, and it does not err in the misapprehension of the rules of evidence affecting the judgment, and contrary to the purport of denying the selection of evidence and fact-finding which belong to the exclusive jurisdiction of the court below.

(3) The conceptual elements of the "multi-stage" proposed by Article 2 subparagraph 5 of the Sales Control Act are as follows: ① the participation of the salesperson in the phase reaches at least three stages; ② The two can be summarized as follows: (i) the participation of the salesperson in the phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of phase of participation of the salesperson; and (ii) the payment of the bonus does not require the payment of the bonus not only the sales performance of the immediate assistant salesman of the pertinent salesperson but also it is affected by the sales performance of the said assistant salesman (see Supreme Court Decision 2005Do977, Nov. 25, 2005).

According to the reasoning of the judgment below, the court below also found in the above purport that the sales organization (title omitted) constitutes multi-level marketing organization or any similar organization composed of persons who have joined the multi-level marketing organization or any similar organization by phase, and it does not err in the misapprehension of legal principles as to multi-level marketing organization or any similar organization by phase, as otherwise alleged in the ground of appeal.

The ground of appeal disputing the judgment of the court below on the multi-stage multi-level marketing organization that is composed of the remaining multi-level marketing salespersons, multi-level marketing organizations, or other similar persons by phase is ultimately a fact-finding court, and it cannot be accepted all as it is erroneous for the selection of evidence and the recognition of facts belonging to the exclusive jurisdiction of the court below, and there is no violation

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

(1) Article 3 of the Act on the Regulation of Conducting Fund-Raising Business without Permission provides that "the act of importing money by promising to pay an amount in full or an amount in excess of the capital to the future" as one of the acts of fund-raising business without permission under Article 2 subparagraph 1 of the same Act. Even if the form of the transaction of goods was displayed, if it is merely a prestigating or prestigating the transaction of goods, and it can be viewed as a de facto monetary transaction, such act may be deemed an act of fund-raising business without permission under the same Act (see Supreme Court Decision 2006Do7470, Jan. 25, 2007).

According to the reasoning of the judgment below, the court below also determined that the gift certificates transaction of this case committed by the defendants pursuant to the above legal principles constitutes an act of fund-raising without delay, and there is no illegality of law such as misunderstanding of legal principles as to the act of fund-raising without delay, as otherwise alleged in the ground of appeal. The ground of appeal disputing the judgment of the court below as to the remaining act of fund-raising without delay is ultimately unacceptable, and it is not acceptable, and there is no violation of the rules of evidence that affect the judgment

(2) The act of fund-raising under Article 3 and Article 2 subparag. 1 of the Act on the Regulation of Conducting Fund-Raising Business without Permission is an immediate crime that is established immediately after the act of importing the investment in the future by promising to pay the total amount of the investment in the future or an amount in excess of the amount of the investment, and simultaneously completed at the same time. Since the fact that a merchandise coupon buyer used part of the merchandise coupon in a merchandise coupon at a merchandise store is merely after the crime is established, the act of selling merchandise coupon normally used at a general merchandise store is not an act of receiving money by precluding or undermining the transaction of merchandise coupons

(3) Article 16 of the Criminal Act provides that an act of misunderstanding that one's own act does not constitute a crime under the law shall not be punishable only when there is a justifiable ground for misunderstanding. Whether there is a justifiable reason should be determined depending on whether the act of misunderstanding was not aware of the illegality of one's own act as a result of failure to do so, although it was likely that one's own act could have been aware of illegality if he had made a serious effort to avoid it with his intellectual ability (see Supreme Court Decision 2006Do7968, Oct. 26, 2007, etc.).

According to the reasoning of the judgment of the court below, the court below also judged that there is no legal error in accordance with the above legal principles, and there is no illegality in the misapprehension of legal principles as to errors in law as otherwise alleged in the ground of appeal. The remainder of the grounds of appeal disputing the judgment of the court below as to Defendant 8’s assertion that it constitutes errors in law is ultimately unacceptable, and it is not erroneous in the selection of evidence and the recognition of facts which belong to the exclusive jurisdiction of the court below, and there is no violation of the rules of evidence that affect the

D. The part on sentencing

(1) In full view of Defendant 1’s motive and background, method and consequence of the instant crime, the above Defendant’s age, character and conduct, family relationship, educational degree and career, etc., which can be recognized by the records, even if all circumstances alleged in the grounds of appeal are considered, the court below’s sentencing against the above Defendant is acceptable, and there is no obvious reason to acknowledge that the sentencing of the court below is extremely unfair.

(2) In this case where Defendant 3, 4, 12, and 17 was sentenced to imprisonment for less than 10 years, the grounds that the determination of the sentence against the above Defendants is unreasonable are not legitimate grounds for appeal in accordance with Article 383 subparag. 4 of the Criminal Procedure Act.

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Hong-hoon (Presiding Justice)