2017 Highly 709,2017 Highly 738(Joint) Aggravated Punishment, etc. of Specific Economic Crimes (Aggravated Punishment, etc.)

Violation of Korean law (Fraud)

1. A;

2. B

3. C.

Final leather, stuffed (public prosecutions), converging (public trial)

Law Firm D (for Defendant A)

Attorney E

Attorney F (for the defendant B)

Law Firm G (for Defendant C)

[Defendant-Appellant]

January 11, 2018

[Defendant A] The defendant shall be punished by imprisonment for a year and six months.

[Defendant B] The defendant shall be punished by imprisonment for one year.

However, the execution of the above punishment shall be suspended for a period of two years from the date this judgment became final and conclusive.

except that the execution of the above punishment shall be suspended for two years from the date this judgment becomes final and conclusive.

Criminal Facts1)

1. Defendant A (2017 Gohap709)

From October 31, 2011 to September 30, 2013, the Defendant was the representative director of the company which operates the business of manufacturing and selling electronic components. The Defendant knew that it is possible to borrow money from the Seoul Guarantee Insurance Co., Ltd. in receipt of a guaranty insurance policy in the Seoul Guarantee Insurance Co., Ltd., and concluded a false purchase contract with the Seoul Guarantee Insurance Co., Ltd. and agreed to conclude a guarantee insurance contract with the Seoul Guarantee Insurance Co., Ltd.

Around July 27, 2012, the Defendant: (a) borrowed money equivalent to KRW 750,600,000 from the K-si K-si office of the K-si K-si, which is a simple loan; (b) however, (c) the K-si K-si may purchase KRW 834,00,00 from the K-si K-si K-si K-si K-si, and (d) in advance, 90% of the contract amount shall be paid in advance; and (d) the K-si K-si shall deliver insurance money to the Seoul K-si 20,000 in the name of the Seoul K-si K-si K-si's K-si's K-si's K-si's 20,000, and (e) the Defendant received 106,000,000,000,000,000,000,000,000,000,000,0000.

2. On April 1, 2016, Defendant B and C (2017Dahap738) sentenced two years of suspension of execution to six months of imprisonment for the crime of violation of the Road Traffic Act in the Goyang Branch of the Seoul District Court (hereinafter “Seoul District Court”) on April 1, 2016, Defendant C was sentenced to three years of suspension of execution on September 22, 2016 due to the violation of the Financial Investment Services and Capital Markets Act at the Seoul Southern District Court (hereinafter “Seoul Southern District Court”) and the judgment became final and conclusive on June 9, 2017. The Defendants were able to obtain a guarantee insurance policy issued by the Seoul Southern District Court (hereinafter “Seoul District Court”) with the knowledge that it is possible to obtain a loan from the Dispute Resolution Board, and were able to receive money and valuables from the company in the name of fees or investment, etc.

The defendant B, 00,00,00 won, 10,000 won, 10,000,000 won, 20,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,0000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,000,000,00,000,00,00,00,00,00,00).

[2017 709, 738]

1. Each legal statement of the defendant A and C

1. Defendant B’s legal statement

1. Each legal statement of witness A, B, and C;

1. Each legal statement of witness M and N;

1. Some statements in the suspect examination protocol of each prosecutor's office against the Defendants (including N's statements in the prosecutor's interrogation protocol with the Defendants B)

1. Each prosecutor's statement concerning M and N;

1. Each police interrogation protocol of M or N;

1. The police statement of the defendant A;

1. A written statement of the defendant A and N;

1. Recording notes in cases of 2017 high-liability815 (A);

1. One copy of the written indemnity examination, one copy of the written indemnity examination, one copy of the written request for review of data on compensation, two copies of the written request for data on review of insurance accidents, one copy of the written request for insurance proceeds, one copy of the written request for insurance proceeds, one copy of the purchase standard contract, two copies of the written request for insurance proceeds, one copy of the reply, content certification, and reply respectively, one copy of the written request for change of contract for the supply and sale of goods, one copy of the written request for remittance of insurance proceeds, one copy of the goods supply and sale contract, one copy of the written request for remittance, five copies of the written request for payment of insurance proceeds, five copies of the written request for payment of insurance proceeds, one copy of the written request for payment of insurance proceeds, one copy of the written request for payment of insurance proceeds, one copy of the written request for payment of insurance proceeds, one copy of the written request for payment of insurance proceeds, one copy of the written request for review data, one copy of the written request for review data, one copy of the written request for insurance proceeds, one account purchase and sale contract, one account.

1. Previous convictions in judgment: Five copies of the C-related written judgment, and inquiry into criminal and investigation records records;

Application of Statutes

1. Article applicable to criminal facts;

A. Defendant A: Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 13719, Jan. 6, 2016; hereinafter “former Act on the Aggravated Punishment, etc. of Specific Economic Crimes”) and Article 347(1) of the Criminal Act

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

1. Defendants B and C of concurrent crimes: The latter part of Article 37 of the Criminal Act and the former part of Article 39 (1) of the Criminal Act;

1. Statutory mitigation;

Defendant B and C: The latter part of Article 39(1) of the Criminal Act and Article 55(1)3 of the Criminal Act ( Taking account of equity in cases where a judgment is rendered simultaneously with each crime of a final judgment)

1. Discretionary mitigation;

Defendants: Articles 53 and 55(1)3 of the Criminal Act (The following extenuating circumstances are considered for the reasons for sentencing)

1. Suspension of execution;

Defendant B and C: Determination as to the assertion of the Defendant and the defense counsel, which have been favorable to each of the grounds for sentencing under Article 62(1) of the Criminal Code

1. Summary of the defendant A, C and their defense counsel's arguments

A. Summary of the defendant A and his defense counsel

1) While carrying out the business through the Home shopping, N, the actual operator of L, the L, the L, the Bank of Korea (hereinafter referred to as the "L"), in manufacturing and selling a black box and selling it through Home shopping, the company that is entitled to receive advance payment from the Seoul, the Seoul, the Seoul, Guarantee Insurance Co., Ltd. (hereinafter referred to as the "Seoul,") through Defendant B and C (hereinafter referred to as the "J") as a business partnership. Defendant A was proposed by Defendant C to participate in the above business as a business partnership. Accordingly, Defendant A entered into a contract for the supply of goods with the J, not by the K, but by the K, for the purpose of supplying the goods in order to supply the goods in order with the order of supply of the goods in this case without the intention to purchase the goods in this case.

2) As stipulated in the instant goods supply contract, Defendant A was paid KRW 750,600,00 under the pretext of advance payment by J as stipulated in the instant goods supply contract. Defendant A concluded the Seoul Guarantee Insurance and the performance advance payment guarantee insurance contract (hereinafter “instant guarantee insurance contract”) to guarantee the payment, and there was no intention to conclude the instant guarantee insurance contract and obtain the insurance money by deceiving the Seoul Guarantee Insurance, and there was no conspiracy between the Defendants to conclude the instant guarantee insurance contract based on the false goods supply contract. The reason why the instant insurance accident occurred in the instant case is because N and M, in collusion with N, they supplied a black box so that P did not know.

B. Summary of the defendant C and his defense counsel

1) The instant goods supply contract is not a false goods supply contract, but a genuine contract entered into in order to carry out a booming transaction.

2) Defendant C introduced Defendant A who tried to increase I’s sales and enter a new business and proposed to sell B’s black boxes to home shopping. During that process, Defendant B and B issued a surety insurance policy in Seoul Guarantee Insurance, and received advance payment from J as a security, and delivered it to Defendant A. Defendant C was not involved in contact with J in the above process or the formation of the business. Defendant C was not involved in the process, and the instant goods supply contract was aware that it was a genuine contract, and was constantly endeavored to successful the black home shopping business. Accordingly, Defendant C did not have any criminal intent to receive insurance money from Seoul Guarantee Insurance, and there was no fact that Defendant A and B conspired with Defendant A for the purpose of receiving insurance money.

2. Determination

(a) Facts of recognition;

According to the evidence duly adopted and examined by this Court, the following facts and circumstances are recognized.

1) On July 27, 2012, Defendant A prepared a purchase standard contract stating that Defendant A shall pay 90% of the above contract amount as advance payment at the time of the order and pay the balance within 10 days after delivery, with the date of the contract as of July 23, 2012. Defendant A supplied 6,00 black boxes to the place designated by J by September 30, 2012. The contract amount is KRW 834,000,000 (including the unit price of KRW 139,000, value added tax).

2) On July 30, 2012, Defendant A, along with the standard purchase contract, submitted to Seoul Guarantee Insurance a business registration certificate, the certified transcript of corporate register, and the financial statements certificate for the last three years, and subscribed to a guarantee insurance contract that guarantees the payment of KRW 750,60,000 under the said purchase standard contract. Seoul Guarantee Insurance Co., Ltd concluded the instant guarantee insurance contract with I as the policyholder, J as the insured, and issued the guarantee insurance policy that provides the advance payment guarantee under the supply contract with I as the insured.

3) From July 27, 2012, Defendant A consulted to enter into a contract for the purchase of goods with P, which is a booming manufacturer through Defendant B, C, etc., on July 31, 2012, Defendant A supplied P, the representative director of P, and P, up to September 25, 2012, KRW 5,000, the contract amount shall be KRW 675,000,000 (including unit price of KRW 135,000, additional tax). The amount of the contract shall be KRW 300,000,000 for the goods supplied by P in excess of the advance payment, and the standard contract for the purchase of goods with the content that P shall pay the price to P within three business days from the deposit date.

4) Meanwhile, around August 1, 2012, J requested confirmation upon the delivery of ‘goods supply and sales contract’ separate from the purchase standard contract of July 23, 2012 between A and J as of August 1, 2012. The contract date of the above goods supply and sales contract is July 30, 2012, and J and I seem to have concluded the above goods supply and sales contract around August 1, 2012. The main contents of the above goods supply and sales contract related to the instant case are as follows:

§ 2(1)"Supply of Goods" means the supply of goods to J by entering into a contract for the supply of goods and other services by the KJ. 2. 'Supply' means the sale of goods and other services supplied by the KJ to J under a contract for the supply of goods. 3. 'Sale' means the sale of goods purchased by the KJ under paragraph 1, and the sale responsibility is entirely limited to I. 'Delivery of goods' to the place of delivery designated by J or J. Article 7(Return and Request for Discharge).On the basis of this, the delivery of goods to the KJ is provided by the KJ for the payment to the KJ and the payment to the KJ for the payment to the KJ at least a certain period of time after return from the date of the order to the KJ or to the KJ's order for the payment to the KJ. In addition to the payment to the KJ's order for the first time after return of goods to the KJ during the period of time fixed by the KJ or the KJ within five (3) months after the date of return of the order to the KJ.

5) On August 1, 2012, J sent 7:25,00 won to the I’s account under the name of 7:50,60,000 after sending the above goods supply and sales contract to I for confirmation. Defendant A immediately remitted 300 million won to the P’s account.

B. Specific determination

1) In full view of the following facts acknowledged by the evidence duly adopted and examined by the court as to whether the instant goods supply contract is a false goods supply contract, and the circumstances that can be inferred therefrom, the J appears to have participated in the transaction only as the subject of the instant goods supply contract, without having a de facto interest in the instant goods supply contract, on the ground that it was at the middle stage of the transaction relationship for the purpose of funding and the creation of profits therefrom, and the risk of collecting the funds provided by J through the Seoul Guarantee Policy issued by the Seoul Guarantee Policy, most of the risks of collecting the funds, and without having a substantial interest in the instant goods supply contract, it appears that the Defendants participated in the transaction only as the subject of the instant goods supply contract, which is the object of the instant goods supply contract and collects the funds calculated at a certain rate according to the principal amount and interest rate. In addition, the Defendants appears to have been aware of these circumstances and included in the middle stage of the transaction structure of the goods supply contract for the purpose of the instant goods supply contract or the genuine goods supply contract, and thus, it is difficult for the defense counsel to accept the pertinent goods supply contract.

In doing so, even if an interested party in a transactional relationship was incorporated into a trade structure of the relevant business by taking the form of a party to a contract for the supply of goods with the main purpose of financing, it is difficult to readily conclude that a contract for the supply of goods is a false contract for the supply of goods solely on such circumstance. However, if the party to the transaction participates solely in the transaction for financing and recovery without having an interest in the goods subject to the contract without the intention to become a party to the contract for the supply of goods, but enters into a contract for the supply of goods as a party to the Seoul Guarantee Insurance, such contract for the supply of goods should be deemed a false contract for the supply of goods.

B) It appears that L was originally planned to receive a black box from P and sell it in home shopping. However, L, which failed to carry out the above business, has been able to color investors or business partners capable of raising funds for the business, and Defendant B and C, the representative director of I through Defendant B and C, had opened the above B and C with the interest to raise funds for the business. However, I did not hold funds to the extent of promoting the above business, and accordingly, Defendant B and C, etc. introduced the "the method of financing the business funds from J as collateral for the purpose of financing the funds through JJ", and Defendant A appears to include the guarantee insurance policy of Seoul for the purpose of financing the funds through JJ in the process of the transaction of the goods supply contract. In other words, it appears that it was necessary to include the guarantee insurance policy of the JJ in the process of the transaction of the goods supply contract.

C) From July 25, 2012 to July 27, 2012, the Defendants and W agreed to prepare a standard form contract for the purchase of goods between J and I. The standard form contract for the above goods stipulates 6,000 black boxes supplied to J. Meanwhile, around that time, the Defendants agreed to prepare a standard form contract for the purchase of goods between I and P. The number of black boxes supplied from P is 5,000 if the standard form contract for the purchase of goods was the same as the original purchase of goods, but I would have to be obliged to supply 6,000 black boxes from P to July 27, 2012. In addition, considering the fact that the amount of the above standard form contract for the purchase of goods would have been 5,00,000 won and the amount of advance payment for the goods could not be paid from J to Seoul.

D) As to the instant goods supply contract, around July 27, 2012, the contract date was drafted on July 23, 2012, but there were two disposal documents, such as the standard purchase contract for the goods as indicated on July 23, 2012 and the sale contract for the goods as indicated on August 1, 2012, but the contract date was as indicated on July 30, 2012. Furthermore, the standard purchase contract for the goods purchase as of July 23, 2012, stating only the most basic contents of the instant goods supply contract, including the volume, unit price, total amount, time and method of delivery, and the payment schedule and method of J’s purchase price, and the standard purchase contract for the said goods was submitted to Seoul Guarantee Insurance and became basic materials to enter into the instant guarantee insurance contract.

However, around August 1, 2012, the contract for the supply and sale of the article dated July 30, 2012 provides that the rights and obligations of I and J shall be more detailed, and J shall not bear any risk with respect to the sale of the article, and if the money is not recovered, I shall have the right to return the whole amount of the article. Specifically, Article 2(3) of the above contract for the supply of the article and the sale of the article shall be entirely borne by J. Article 7 provides that if the schedule for the supply of the article and the sale of the article and the sale of the article and the sale of the article are revoked or delayed, the order for the sale of the article and the sale of the article and the sale of the article and the sale of the article and the sale of the article shall be removed at the rate of Seoul J as well as by the rate of the total amount of the article and the sale of the article and the sale of the article and the sale of the article and the sale of the article in Seoul J.

In light of the contents of the above contract for the supply of goods and the sales of the goods, the J appears to have planned only ‘the supply of booms' and ‘the repayment of advance payment and profits therefrom' for the consideration of advance payment made to I. In such a case, if both J and I have ‘the substance of the payment and consideration agreed upon through the contract for the supply of the goods in this case' and ‘the repayment of advance payment and profits therefrom', it is reasonable to view that the contract for the supply of the goods in this case constitutes a monetary loan contract regardless of its name or language. Furthermore, considering the fact that the J and the Defendants formed a transaction for the purpose of financing, while they seem to have taken the form of the contract for the supply of goods to obtain the surety insurance policy from the Seoul Guarantee Fund, the goods in this case should be deemed to constitute a false goods supply contract, and the Defendants and the Defendants were fully aware of these circumstances.

E) After entering into the instant goods supply contract, J shall manufacture and supply black boxes.

Not only did not intervene in the process at all, but also it appears that J did not pay attention to the interference of the ordering place of the sale (small enterprise distribution center or X home shopping) by supplying the black box, and did not enter into any contract with the ordering place or L. In other words, J only entered the middle phase of the transaction relationship with the black home shopping business, but did not seem to have any different interest in the formation of the transaction relationship after the supply of the goods. In addition, even though the Defendants actively communicate with L during the process of carrying out the business, there was no other discussion about the supply of the black box box or the subsequent business. Considering these circumstances, in light of these circumstances, J merely did not recognize the Defendants as the party to the transaction and did not actually intervene in the business as the party to the transaction with the intent of financing the goods.

2) Determination on intent or conspiracy to commit fraud

In full view of the following facts acknowledged by the evidence duly adopted and examined by the court, the Defendants had the intent to conclude the instant guarantee insurance contract by deceiving the Seoul Guarantee Insurance, and as long as it appears that the Defendants were directly and indirectly involved in the process of concluding the instant goods supply contract and the instant guarantee insurance contract, the Defendants should also be deemed to have been admitted to the public relations. Accordingly, this part of the Defendants A, C, and their defense counsel’s assertion is rejected.

A) Under the premise that the prime contract between the policyholder and the insured for the supply of goods is a contract for the supply of goods, it is reasonable to view that the insured has entered into an insurance contract with Seoul Guarantee Insurance under the premise that the insured has paid advance payment to the insured and then the insured has the obligation to supply the goods. In other words, Seoul Guarantee Insurance entered into the instant guarantee insurance contract on the premise that I bears the obligation to supply the goods to J. However, as seen earlier, the substance of the instant goods supply contract is a monetary consumption and lending contract, and the Defendants were sufficiently aware of the substance of the instant goods supply contract at the time of the conclusion of the instant guarantee insurance contract. Ultimately, even if the Defendants were to have the intent to guarantee the payment of the Seoul Guarantee Insurance, it is reasonable to view that the Defendants were to have entered into the instant guarantee insurance contract under the name of Seoul Guarantee Insurance and at least the Seoul Guarantee Insurance without hiding the fact that the Defendants had the intent to receive the funds by deceiving the Seoul Guarantee Insurance to the Defendants, in light of the content of the instant guarantee insurance contract.

B) Furthermore, Defendant B and C introduced to Defendant A a method of financing funds through J using the guaranty insurance policy issued by the Seoul Guarantee Insurance Co., Ltd.; Defendant B and C shared the role along with W in the process of promoting the black home shopping business by financing funds from J, and practically led I's black home shopping business, such as taking charge of communication, opinion coordination, etc. among interested parties, including Defendant A, J. and L. Unless factual relations and circumstances exist, it is reasonable to view that Defendant B and C participated in the execution of the instant guarantee insurance contract by being aware that the substance of the instant goods supply contract belongs to the Seoul Guarantee Insurance Co., Ltd., even though they are aware that the substance of the instant goods supply contract is a monetary loan contract.

Reasons for sentencing

1. The scope of punishment;

(a) Defendant A: Imprisonment with prison labor for one year and six months to fifteen years;

B. Defendant B and C: Imprisonment from September to June;

2. Scope of recommendations according to the sentencing criteria (Defendant A3);

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

[Special Mitigation] In the case of an intentional act of deception, or where the degree of deception is weak;

[Recommendation and Scope of Recommendations] Reduction Area, Imprisonment of one year and six months to four years

3. Determination of sentence;

The following circumstances shall be taken into account, and the punishment shall be determined by comprehensively taking into account the following factors, such as the age, character and conduct, environment, family relationship, motive and circumstances of each of the instant crimes, and circumstances after the commission of the crime.

A. Common reasons for sentencing

In light of the specific contents of the instant crime and the circumstances after the crime, etc., the Defendants are highly likely to criticize the Defendants in light of the following: (a) even though they are well aware that the goods are premised on the genuine goods supply contract; (b) concluded a false goods supply contract with the J to raise funds for the business of the black home shopping; and (c) obtained the guaranteed insurance policy by deceiving Seoul Guarantee Insurance. The insurance money acquired by the Defendants by deceiving the Seoul Guarantee Insurance amounting to 750,600,000 won; and (d) the Defendants seems to have never recovered from the damage up to now.

However, the Defendants appears to have been actually trying to carry out the black home shopping business, and it seems that they did not intend to enter into a contract for the supply of processed goods without a transaction of the black home. Furthermore, the fundamental cause of the black home shopping business is that P and L did not go through I but sold the black home shopping in the home shopping market. Furthermore, the Defendants appears to have actively participated in the Seoul Guarantee Insurance in the process of using the key insurance policy of the Seoul Guarantee Insurance Co., Ltd. created by J in the course of using the key insurance policy of the Seoul Guarantee Insurance Co., Ltd., and in the process of concluding the guarantee insurance contract of this case and paying the insurance money, despite the exposure of the necessary problems such as Defendant A’s objection, it appears that the Seoul Guarantee Insurance did not pay due attention to the execution of the review business, such as requesting the payment of the insurance money of this case, and such secondaryism might have influenced the expansion of damages.

B. Individual grounds for sentencing

1) Defendant A

As the representative of I, the Defendant, as the principal of the Defendant, uses the surety insurance policy issued by Seoul Guarantee Insurance, as a collateral, KRW 750,600,00,00 for the actual benefit of the Defendant’s use of the guaranteed insurance policy issued by the Seoul Guarantee Insurance as a collateral, should be deemed to have more severe criminal liability regarding the instant crime than B and C. However, the Defendant is deemed to have no record of criminal punishment in addition to those sentenced to a fine twice, and the Defendant used KRW 750,600,000 for the operation of the black Home Shopping Business and I, and does not appear to have used the guaranteed insurance policy individually.

2) Defendant B

The Defendant introduced the means of financing from J through C, and received KRW 26.1 million from N, a substantial operator of L in the process: Provided, That the above KRW 26.1 million, the Defendant appears to include both the name of the Defendant’s financing of funds and the name of the consideration for assisting the past N in the financing of funds, and the Defendant’s perception of his mistake in this court is against this law, and the Defendant has no same criminal record, and the Defendant has to consider equity with the case of the judgment at the same time as the crime of violating the Road Traffic Act (driving) in which the judgment has become final and conclusive.

3) Defendant C.

The Defendant received KRW 1.5 million from B and KRW 2.2 million from A in the course of promoting the black home shopping business. The money that the Defendant received is the consideration for the business performed by the Defendant in connection with the black home shopping business. However, it cannot be denied that the Defendant obtained a certain benefit in connection with the act of deceiving Seoul Guarantee Fund. However, it is reasonable to consider the fact that the money that the Defendant received is a small amount of money, that the Defendant did not have the same criminal record, and that the Defendant should consider the equity in the case of judgment at the same time as the Defendant did not violate the Financial Investment Services and Capital Markets Act.

The presiding judge, judge Kim Jong-tae

Judges Kim Gin-han

Support for judges' organization

1) Based on facts acknowledged by the argument and records of the instant case, within the scope of not infringing the Defendants’ right of defense

The facts charged were partially revised and recognized.

2) The above contract is called as an advance payment, but this is deemed to be a clerical error, so it is stated as an advance payment.

3) The instant crime by Defendant B and C constitutes concurrent crimes as provided in the latter part of Article 37 of the Criminal Act, and thus, the sentencing guidelines do not apply.