Defendant 1 and two others

Defendant 1 and Prosecutor

Yellow Jinia (Public Trial) and user (public trial)

Law Firm Rate, Attorneys Lee Tae-tae et al.

Suwon District Court Decision 2011Gohap149 Decided October 31, 2012

All appeals by Defendant 1 and Prosecutor are dismissed.

1. Summary of grounds for appeal;

A. Defendant 1

The punishment sentenced by the court below (the imprisonment of two years, the suspension of execution of three years, the fine of 120 million won) is excessively unreasonable.

(b) Prosecutors;

(1) misunderstanding of facts or misunderstanding of legal principles (not guilty part of defendant 1)

Article 8-2 of the Act on the Aggravated Punishment, etc. of Specific Crimes (hereinafter “Special Crimes Act”) provides for the aggravated punishment of cases where the amount of violation of Article 10(3) of the Punishment of Tax Evaders Act is at least three billion won or five billion won. As such, where the amount of violation is at least three billion won, the purpose thereof can be acknowledged unless there are special circumstances, in light of most of the fact that the crime is committed not once but multiple times, but multiple times, and thus, the purpose thereof is “for profit-making purposes.” The Defendant: (a) provided that Nonindicted Company 1 (hereinafter “Nonindicted Company 1”) shall, without the actual purpose of running his/her business, deduct the input tax amount or refund the value-added tax; (b) provided that he/she intends to operate his/her business by acquiring profits by unfairly evading taxes without paying the value-added tax; (c) so, the Defendant’s crime of this case should be recognized as profit-making purposes. Nevertheless, the lower court found the Defendant not guilty of this part of the facts charged.

(2) misunderstanding of legal principles (the dismissed part against Defendant 2 and 3)

Article 8-2 of the Aggravated Punishment Act provides for the requirements for special aggravation to punish crimes under the Punishment of Tax Evaders Act as stated in Article 8 of the Aggravated Punishment Act, and the crime under Article 8 of the Aggravated Punishment Act, which can be instituted without filing a complaint or accusation as provided in Article 16 of the Aggravated Punishment Act, should be interpreted as including crimes under Article 8-2. Nevertheless, the court below erred by interpreting Article 16 of the Aggravated Punishment Act by unreasonably reducing the provisions of Article 16 of the Aggravated Punishment Act, thereby making a judgment dismissing each indictment, on the ground that there is no accusation by the tax office against Defendants 2 and 3.

(3) Unreasonable sentencing (guilty part against Defendant 1)

The lower court’s punishment against Defendant 1 is too unjustifiable.

2. Judgment on the prosecutor's assertion of mistake or misapprehension of legal principle

A. The part of acquittal of Defendant 1

(1) Summary of this part of the facts charged

With respect to the facts constituting the crime in the judgment below against the defendant, the prosecutor considered each act in the judgment of the court below as a blanket crime, and prosecuted the defendant by applying Article 8-2 (1) 2 and (2) of the Act on Special Cases and Article 8-2 (1) 2 of the Act on Special Cases.

(2) The judgment of the court below

(A) Article 8-2(1) of the Special Act provides that “for profit-making purposes” refers to acquisition of economic benefits (see, e.g., Supreme Court Decisions 2009Do13342, Feb. 11, 2010; 2010Do7289, Nov. 11, 2010); and Article 10(3)3 of the Punishment of Tax Evaders Act provides that the act of submitting a false list of total tax invoices by seller is almost for the purpose of deducting input tax or refunding value-added tax (hereinafter “tax evasion purpose”). In light of the above special provisions, the purpose of Article 10(3)3 of the Punishment of Tax Evaders Act is to interpret that the aforementioned special provisions are included in “for profit-making purposes” as well as that of Article 10(1)3 of the Punishment of Tax Evaders Act, and thus, the act of submitting a list of total tax invoices for profit-making purposes under the Punishment of Tax Evaders Act is not only for the purpose of collecting taxes by seller, but also for the purpose of collecting taxes by seller.

(B) Based on the above legal principles, it is recognized that the defendant committed each act in the judgment of the court below for the purpose of evading taxes for non-indicted 1, but there is no evidence to prove that there was a purpose of acquiring any other direct or indirect economic benefits. Thus, it cannot be deemed that the defendant had "for profit" at the time of each act in the judgment of the court below.

(2) Judgment of the court below

(A) “Profit-making purpose” as stipulated in Article 8-2(1) of the Aggravated Punishment Act refers to the purpose of acquiring economic benefits. However, in full view of the following: (a) the submission of a list of total tax invoices by false seller as stipulated in Article 10(3) of the Aggravated Punishment Act generally includes the purpose of tax evasion or tax refund; and (b) the intent of the enactment of Article 10(3) of the Aggravated Punishment Act and Article 8-2(1) of the Aggravated Punishment Act, the form and nature of the provision, etc. of the Aggravated Punishment Act, the purpose of preparing and submitting a false list of total tax invoices by seller is only tax evasion or tax refund, and the direct and indirect economic benefits do not fall under the purpose of profit-making under Article 8-2(1) of the Aggravated Punishment Act

(B) In light of the records and the above legal principles, a thorough examination of the evidence presented at the court below, the court below's finding the defendant not guilty of this part of the facts charged on the above grounds is justified. The defendant is recognized as having submitted a list of total tax invoices by false seller to the tax office for the purpose of tax evasion for non-indicted 1, but it is not sufficient to recognize that the defendant had a purpose of acquiring direct and indirect economic benefits other than the purpose of tax evasion, and there is no other evidence to acknowledge that there is no other evidence to prove that there was "for profit-making purpose" of the defendant. Thus, the court below's determination of not guilty of this part of the facts charged for the above reasons is not erroneous as alleged by the

B. The dismissal of the prosecution against the defendant 2 and 3

(1) A prosecutor cannot institute a public prosecution against an offense under the Punishment of Tax Evaders Act without accusation by the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office (hereinafter “the Commissioner of the National Tax Service, etc.”). Article 8 of the Act on the Punishment of Tax Evaders (Article 21 of the Punishment of Tax Evaders Act); Article 3(1), 4, or 5 of the Act on the Punishment of Tax Evaders; Article 8-2 of the Act on the Punishment of Tax Evaders provides that the amount of evaded tax, etc. is five hundred million won or more per year; Article 10(3) and the former part of Article 10(4) of the Act on the Punishment of Tax Evaders; Article 16 of the Act on the Punishment of Tax Evaders provides that the special provision on the punishment of Tax Evaders shall be applied to an offense under Article 8-2 of the Act on the Punishment of Tax Evaders and the Act on the Punishment of Tax Evaders and the Act on the Punishment of Tax Evaders; Article 8-2 of the Act on the Punishment of Tax Evaders and the Specific Provisions on the Punishment of Tax Evaders Act on the same statutory provision.

(2) Therefore, the judgment of the court below that dismissed all of the public prosecutions against the above defendants 2 and 3 is just, and the prior prosecutor's assertion on the different premise is without merit.

3. Determination on the assertion of unreasonable sentencing by Defendant 1 and the prosecutor

When Defendant 1 comes to trial, there are extenuating circumstances to consider the Defendant, such as the confession of the instant crime and the depth of the instant crime, the Defendant did not have any record of criminal punishment for the same kind of crime, and there was no record of having been sentenced to a suspended sentence or heavier punishment.

However, the defendant ordered co-defendant 2, 3, etc. to establish the so-called "explosion company" by lending the name of a third party, thereby committing the crime of this case in an intelligent and organized manner. The crime of this case is heavy, such as the total supply value of the aggregate tax invoices for false individual suppliers submitted to the tax office reaches about KRW 3.5 billion, and the defendant appears to have ordered the name lender through the co-defendant to make a false statement even during the investigation process. The sentence against the defendant seems to have been determined by considering the above various circumstances. The decision of the court below on the defendant seems to have not any special change in circumstances that may differ from the judgment of the court below. Considering the various sentencing conditions indicated in the records, such as the defendant's age, character and behavior, environment, motive and circumstance of the crime, means and result of the crime, etc., the defendant's punishment against the defendant is adequate, too heavy or unreasonable, and thus, the defendant and the prosecutor's argument of unfair sentencing is without merit.

4. Conclusion

Therefore, the appeal by the defendant 1 and the prosecutor is without merit, and all of the appeals are dismissed under Article 364 (4) of the Criminal Procedure Act. It is so decided as per Disposition.

Judges Lee Jung-hun (Presiding Judge)