[1] Whether a business that prohibits the provision of funds, etc. under Article 25 (1) 3 of the former Prevention of Prostitution, etc. Act refers only to a business that mainly aims at prostitution (negative)

[2] The case holding that the crime of violation of Article 25 (1) 3 of the former Act on the Prevention of Prostitution, etc. is committed in a case where the proprietor of an entertainment drinking club provides funds under the pretext of employment advance payment with knowledge of the fact that it is used for the crime

[1] In a case where a prostitution is continuously and repeatedly arranged for the purpose of profit-making even in a case where a prostitution is performed solely or mainly for the purpose of prostitution, it constitutes an act of arranging prostitution for the business under Article 25 (1) 2 of the former Act on the Prevention of Prostitution, etc. (repealed by Article 2 of the Addenda to the Act on the Punishment of Acts of Arranging Sexual Traffic, Etc., Act No. 7196, Mar. 22, 2004). If a person knowingly provided funds, etc. with knowledge of the fact that it is used directly or indirectly for such a crime, such act constitutes a violation of Article 25 (1) 3 of the same Act.

[2] The case holding that Article 25 (1) 3 of the former Act on the Prevention of Prostitution, Etc. (repealed by Article 2 of the Addenda to the Act on the Punishment of Acts of Arranging Sexual Traffic, Etc., Act No. 7196, Mar. 22, 2004) constitutes a crime of violating Article 25 (1) 3 of the same Act where a person knowingly provides funds as an employment advance payment with knowledge of the fact that he/she has been used for

[1] Article 25 (1) 2 and 3 of the former Prevention of Prostitution, etc. Act (repealed by Article 2 of the Addenda to the Act on the Punishment of Arrangement of Commercial Sex Acts, Etc., Act No. 7196, Mar. 22, 2004) / [2] Article 25 (1) 3 of the former Prevention of Prostitution, etc. Act (repealed by Article 2 of the Addenda to the Act on the Punishment of Acts of Arranging Commercial Sex Acts, Etc., Act No. 7196, Mar. 22, 2004)

Defendant 1 and two others

Prosecutor

Ulsan District Court Decision 2005No651 decided Oct. 7, 2005

All the judgment below is reversed, and the case is remanded to the Ulsan District Court Panel Division.

We examine the grounds of appeal.

1. Summary of the facts charged

Of the facts charged in the instant case, the summary of the facts charged of violation of the Prevention of Prostitution, etc. Act, which was acquitted by the lower court, was asked by Nonindicted 1 and 2, the proprietor of the instant entertainment drinking house, who was employed by Nonindicted 1 and 2 as the female employees of the said shop on May 28, 2002, to loan Nonindicted 3’s employment advance payment for the said entertainment drinking house. After having interview Nonindicted 3, 20 million won after having interview Nonindicted 3, and had the said proprietor employ Nonindicted 3 for the business purpose, thereby allowing the said proprietor to arrange for the said prostitution. The Defendants provided a total of KRW 97 million for 26 times from June 28, 200 to March 16, 2004.

2. The judgment of the court below

The court below held that Article 25 (1) 3 of the former Prevention of Prostitution, etc. Act (amended by Act No. 7196 of Mar. 22, 2004; hereinafter "the Act") provides that only those who provide funds, etc. directly related to the act of prostitution to a person who provides or arranges a place for the act of prostitution shall be interpreted as a restrictive provision that punishing the person who provides funds, etc. directly related to the act of prostitution; on the basis that the main purpose of the business is not the provision of the place of the act of prostitution or the act of prostitution and the provision of funds, etc. to the person who provides other business, it shall not be interpreted and applied to the case where the defendants jointly provided the money to the person who provided or arranged the act of prostitution, and it is difficult to find that the above employees were not guilty of the above employees' act of lending money for the purpose of Article 25 (1) 2 of the Act.

3. Judgment of the Supreme Court

However, we cannot accept the above judgment of the court below for the following reasons.

A. Article 25(1) of the Act provides that Article 25(1) of the Act provides that a person who provides a place for prostitution for the business purpose (Article 25(1)1) and a person who arranges the act of prostitution (Article 25(2)2) for the business purpose shall be punished, and Article 25(3)3 provides that a person who provides funds, land, or buildings (hereinafter “funds, etc.”) shall be punished, knowing that he/she is used for the crime referred to in subparagraph 1 or 2. Where a person arranges the act of prostitution only for the purpose of prostitution or for the main purpose of prostitution, as well as for other businesses, in cases where a person arranges the act of prostitution continuously and repeatedly for the purpose of profit-making, it shall be deemed that the act constitutes a crime of violating Article 25(1)3 of the Act if he/she provides funds, etc. with knowledge of the fact that it is used directly or indirectly for such crime.

B. According to the records, Nonindicted 1 and 2, the owner of the instant entertainment drinking club, are aware that, while running the said entertainment drinking club, Nonindicted 1 and 2 had female employees do so continuously and repeatedly for the purpose of making a profit. This constitutes a crime that constitutes a crime of violating Article 25(1)2 of the Act (for the above owners, the judgment of conviction in the first instance became final and conclusive). As recognized by the lower court, the Defendants knew that the owners of the instant entertainment drinking club had female employees do so as above, even though they were aware of the fact that they had to do so, they were given a loan to female employees, and the principal and interest of the loan was received from the owners of the instant entertainment drinking club. According to the evidence employed by the lower court, female employees of the instant entertainment drinking club did not bear interest on the instant entertainment drinking club, work for the principal and interest of the entertainment drinking club, and the Defendants agreed to pay the principal and interest of the said entertainment drinking club in advance, and the Defendants agreed to do so under the name of the principal and interest of the entertainment drinking.

In light of the above circumstances, the defendants should be deemed to have provided funds to the owners of the entertainment tavern in this case as a pre-employment penalty knowing that they were used in the crime, and it is reasonable to view that the defendants constitute a crime of violation of Article 25 (1) 3 of the Act.

Nevertheless, the judgment of the court below which acquitted the Defendants solely for the reasons stated in its holding is erroneous in the misapprehension of the rules of evidence or by misapprehending the legal principles on the interpretation and application of Article 25 (1) of the Act, which affected the conclusion of the judgment. The grounds of appeal pointing this out are with merit.

C. Therefore, the part of the judgment of the court below which acquitted cannot be reversed, and the part of the conviction in relation to concurrent crimes under the former part of Article 37 of the Criminal Act also should be reversed.

4. Conclusion

Therefore, all of the judgment below is reversed, and 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 Yong-dam (Presiding Justice)