2016Gohap1299 Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

1. A;

2. B

The highest head of the public trial, the fump of use (public trial)

Attorney C (National Assembly for the Defendant)

September 22, 2017

Defendant A shall be punished by imprisonment for two years, and imprisonment for one year and six months, respectively.

However, the execution of each of the above punishment against the Defendants shall be suspended for three years from the date this judgment became final and conclusive.

Criminal facts

Defendant A is the representative director of “A” who operates a rental business on November 19, 2016 after being sentenced to 8 months of imprisonment and 2 years of suspended execution on November 19, 2016 due to a violation of the Labor Standards Act on November 11, 2016, and Defendant B is a director of the said company.

1. The sole criminal conduct of Defendant A;

On October 23, 2012, Defendant A stated to the effect that “F” office located in Jongno-gu Seoul, Jongno-gu, would be “the construction will be completed without any longer than before the performance” to the victim H who wants to engage in G contact at the “F office” office, and that there is no anything to the use of the performance hall.

However, in fact, it was urgent to pay interest on the debt amounting to 45.7 billion won, and the building was completed, but no internal facilities and performance facilities have been installed, and because it was unable to pay the construction cost for the construction of the building, it was not an indirect possession of the above F, and because it was not good for other performance halls, there was no intention or ability to complete the construction before the victim's performance because it was impossible to do so.

Nevertheless, the Defendant, as above, by deceiving the victim as above, received 648,560,00 won in total as rental fees, from the victim, as the sum of KRW 1,14,194,568,00,000, and KRW 259,424,000 on December 21, 2012, 2012, and KRW 10,000,000 on February 22, 2013, and KRW 94,568,000 on March 4, 2013.

Accordingly, the defendant acquired a total of 648,560,000 won from the victim.

2. Defendants’ co-principal conduct

On March 5, 2013, the Defendants: (a) borrowed the victim with the construction cost of KRW 1.4 billion from the above place; and (b) concluded that the Defendants would complete the remainder of the construction cost. In addition, the Defendants said that the Defendants would pay the F’s lease proceeds and the rental fees first, and would offer the D’s stocks as security for transfer, until they fully repay the borrowed money.

However, in fact, the Defendants were unable to receive the rent from the performance planning company at the time, and as above, it was paid at the time of paying the interest corresponding thereto, and as well as the repayment of the refund loan for the existing debts was not smooth, even if the amount was borrowed from the victims, there was no intention or ability to repay the debts by preferentially repaying the rent of the building with the rent of the building or the rent of the lease, or providing D stocks as a collateral for transfer.

Nevertheless, the Defendants, as above, by deceiving the victim as above, received from the victim the total sum of KRW 1,400,000,000 from the victim as the loan amount of KRW 1,40,000,000 on March 5, 2013, KRW 100,000 on March 8, 2013, and KRW 700,000,000 on March 13, 2013, and KRW 50,000 on March 22, 2013.

As a result, the Defendants conspired to obtain a total of KRW 1,400,000 from the victim.

Summary of Evidence

1. Defendants’ respective legal statements

1. Each legal statement of the witness H and J;

1. The part on which Defendant A’s statement was written in the suspect interrogation protocol of the prosecution (as of March 17, 2016)

1. The prosecutor's statement to K;

1. The first police suspect interrogation protocol against Defendant A, which contains some statements;

1. (State) A statement of situation under J representative director;

1. The F Rental Contract, each transfer certificate, each court decision, a loan certificate, each letter of acceptance for disposition, written acceptance for disposal, transfer document, written statement of payment in and out of the deposit, written statement of mediation for the public-private partnership under Article 22 of the Seoul Central District Court, written notice of confirmation of the execution of the right of retention, all the registered matters

1. Previous convictions indicated in the judgment: Before the disposition is made, and a report on the result of confirmation;

Application of Statutes

1. Article applicable to criminal facts;

(a) Defendant A: Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 347(1) of the Criminal Act (the crime of defraudation by government officials), Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 347(1) and Article 30 of the Criminal Act (the crime of defraudation by government officials)

B. Defendant B: Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 347(1) and 30 of the Criminal Act

1. Handling concurrent crimes;

Defendant A: the latter part of Article 37 and Article 39(1) of the Criminal Act

1. Aggravation for concurrent crimes;

Defendant A: the former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act (an aggravated punishment for concurrent crimes prescribed in the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) due to the misappropriation of more heavy loan funds)

1. Discretionary mitigation;

Articles 53 and 55(1)3 of the Criminal Code (The following consideration shall be taken into account in favor of the reasons for sentencing)

Judgment on the Issues

1. The fact of fraud in Paragraph 1 of the judgment

A. Summary of Defendant A’s assertion

The victim had been well aware of the fact that he had a right to retention in the F Building (hereinafter referred to as the "the building in this case") and it does not interfere with the progress of G Cont (hereinafter referred to as the "public performance in this case") in the judgment due to the exercise of the right of retention, so even if the defendant did not mention it separately, it does not induce the victim, but D (hereinafter referred to as the "D") did not have any intent to complete the construction at the time of conclusion of the rental contract (hereinafter referred to as the "lease") for the performance in this case, because there was a difficulty in raising funds due to the wind that other public performers who had entered into the rental contract and the balance of the intermediate payment and the payment of the remainder, and therefore, D (hereinafter referred to as "D") did not have any capacity to complete the construction at the time of conclusion of the rental contract for the performance in this case.

B. Determination

1) In full view of the evidence duly admitted and examined by this Court, the following facts or circumstances are revealed.

A) The victim stated that the Defendant would not have any right of retention on the instant building, and that he would ask the Defendant to the effect that he would not have any right of retention (for example, six pages of the record of the witness examination). The JJ, which directly concluded the instant rental agreement, sent the above notice at the time that it stated that the Defendant would resolve the problem of lien and that he would have known the victim of this (for example, 6, 13 pages of the record of the witness examination).

B) On June 4, 2012, where the problem of construction cost is not resolved in D, treatment shipbuilding sent a certificate of content to exercise the right of retention on the instant building. From July 13, 2012, by occupying the instant building through a security service provider, it restricted access to the performance of the instant building. On March 27, 2013, the performance hall was obstructed and the said performance manager’s access was prohibited (the treatment shipbuilding that has the right to the construction cost of the instant building did not have the D’s assets secured as security other than the said building, and even if the said building was sold by auction, it was impossible to collect all the claims even if the said building had not been sold by auction. Accordingly, the intention to obtain satisfaction from the performance producer by affecting the preparation and progress of the performance by exercising the right of retention can have been achieved).

C) As indicated in its reasoning, the Defendants were able to borrow KRW 1.4 billion from the victim (hereinafter “the instant loan”) and complete the installation of stage equipment and the performance of the instant performance. However, the victim would have not concluded the said contract if he had known that the performance of the instant performance would have to be possible if he was able to lend money exceeding twice the rental fee at the time of the instant rental contract.

D) At the time of the conclusion of the instant rental contract, D had much more total liabilities (53 billion won) as of December 31, 2012, and D had total assets (39.9 billion won) exceeded total assets. The instant building and land consisting of most assets had no secured value due to the relationship already registered in the trust ledger with the lending banks as priority beneficiaries. The only revenue source rent of D is not an investment of the leased performance producer or it is difficult to receive performance when the performance is revoked by exercising the lien.

2) According to the above facts, even though Defendant A did not have the intent or ability to complete the installation of the stage equipment at the time of concluding the instant rental agreement, it can be sufficiently recognized that Defendant A was urged to complete the installation of the stage equipment before the instant performance, and received rent from the victim.

2. The second fraud in the holding

A. Summary of the Defendants’ assertion

In order for the victim to proceed to perform the performance of this case, it is necessary to directly contact with the installation company of stage machines. The expenses are calculated and the defendants lent the installation fees to the defendants. Thus, the defendants did not deceiving the victim, unlike the expected amount, D merely lacks the intent or ability to repay the expenses at the time of the loan of this case, because it is difficult for the defendants to use the substitute loan to reduce the rent and make it difficult to pay the rent difficult.

B. Determination

1) In full view of the evidence duly admitted and examined by this Court, the following facts or circumstances are revealed.

A) On March 2013, the Defendants asked the victims of the lack of the cost to pay for the installation of the stage equipment, and asked whether the performance of the instant performance can be postponed or other places. On February 20, 2013, the victims had already commenced the sale of the instant performance pocket and could not delay the performance, and it was virtually impossible to interfere with the performance other than the scheduled date of the performance. Accordingly, the costs necessary for completing the installation of the performance (the wife was KRW 90 million added to the construction) after discussing with the Defendants were calculated, and then the amount was lent to the Defendants.

B) On March 13, 2013, the Defendants promised to preferentially pay and transfer 10,000 shares of D owned by the Defendants, in preparation for the case where the Defendants could not repay money from the victims within the time limit while borrowing money from the victims.

C) However, the Defendants used only the rent proceeds or rent fees for the instant building as operating expenses of a theater, such as various public charges and monthly salary for employees, and did not repay the loans to the victims. Defendant A already transferred 2,400 shares of D shares to a third party before the instant loan was granted, and even after the loan was granted, the said shares were transferred to another third party.

D) Since the repayment loan promoted by the Defendants was 12 billion won out of the loan 24 billion won of a new bank loan, the possibility that the new bank waives the preferential right to payment of the remainder of the loan (12 billion won) and cooperates with the above repayment loan is not high.

E) Meanwhile, Defendant A was unable to pay wages to D employees from February 2013. Defendant A was punished as a violation of the Labor Standards Act, as stated in the first head.

2) In light of the details and amount of the instant loan, the current status and financial situation of D at the time of the instant loan, etc., it can be sufficiently recognized that the Defendants, as stated in its reasoning, provided stocks as collateral and got profits therefrom, despite the lack of sufficient intent and capacity to repay the loan at the time of the instant loan.

Reasons for sentencing

1. Defendant A

(a) Scope of applicable sentences under Acts: Imprisonment with prison labor for a period of one year and six months from June to twenty years; and

(b) Reference to the sentencing criteria;

[Determination of Punishment] Fraudulent Crime Group, General Fraud, Type 3 (at least 500 million won, but less than 5 billion won)

[Special Sentencing] If a person was not punished or whose damage was recovered from a considerable part;

[Scope of Recommendation] Imprisonment of 1 year and 6 months to 4 years (Mitigation)

(c) Determination of sentence;

The crime of this case is committed by the Defendant, the representative of the performance hall rental company, who is a public performance hall, in spite of the exercise of the right of retention on the performance hall building, and the performance can be installed before the performance of the performance, and the rent is paid from the performance producer. Furthermore, in a situation where the performance is not sufficient, it is obtained by borrowing large amounts of expenses for the installation of the performance hall from the performance producer with large amounts of expenses for the installation of the performance hall, and it is not easy that the crime and the crime

However, in the case of the rental fee fraud, the performance of this case was almost scheduled and the risk of damage was not realized considerably. In the case of the loan fraud, the loan fraud, after deducting approximately KRW 650 million from the loan to the victim for the follow-up performance of the above performance, the defendant deducted the above loan to recover a certain amount of damage. In addition, the personal gain of the defendant seems to have little profit, and the victim did not want the punishment of the defendant, and the equity should be considered in the case of judgment simultaneously with the crime for which the first head judgment in the judgment became final and conclusive. In addition, the defendant's age, character and behavior and environment, motive and consequence of the crime, relationship with the victim, circumstances after the crime, etc., and the execution of the loan shall be suspended.

2. Defendant B

(a) Scope of applicable sentences under law: Imprisonment for one year and six months to fifteen years; and

(b) Scope of recommendations based on the sentencing criteria;

[Determination of Punishment] Fraudulent Crime Group, General Fraud, Type 3 (at least 500 million won, but less than 5 billion won)

[Special Mitigation] In a case where punishment is not granted or a considerable part of damage is recovered;

[Scope of Recommendation] Imprisonment of 1 year and 6 months to 4 years (Mitigation)

(c) Determination of sentence;

The crime of this case was committed by the defendant, who is a director of the performance hall rental company, by deceiving the public performance producer who entered into the rental contract with the representative director, and is not less than 1.4 billion won in light of the amount of damage, etc.

However, the defendant did not participate in the conclusion of the rental contract with the victim, and there is a minor degree of participation in the crime compared to A, such as opposing the borrowing of KRW 1.4 billion from the victim. Furthermore, the victim deducted the rental fee of KRW 650 million for the follow-up performance of the above performance from the above loan, thereby recovering certain damages for a certain portion, and the defendant's personal gains were rarely earned, and the victim does not want the punishment of the defendant. In addition, the defendant's age, character, character and environment, motive and consequence of the crime, relationship with the victim, circumstances after the crime, etc., are considered as shown in the sentencing guidelines, and the execution thereof is suspended.

The presiding judge and judges;

Judges Sung Jae-in

Judges' Index

1) In the case of Defendant A, each of the crimes in its holding is not subject to the sentencing guidelines in relation to concurrent crimes under the latter part of Article 37 of the Criminal Act, but the sentencing guidelines are indicated for reference.