[1] The meaning and requirements of "the network", which is the element of fraud

[2] The meaning of "a false application or any other fraudulent means" under Article 40 of the Subsidy Management Act

[1] Article 347 of the Criminal Code / [2] Article 40 of the Subsidy Management Act

[1] Supreme Court Decision 2003Do7828 Decided April 9, 2004 (Gong2004Sang, 844), Supreme Court Decision 2017Do20682 Decided August 1, 2018 (Gong2018Ha, 1892) / [2] Supreme Court Decision 99Do4101 Decided January 5, 2001 (Gong2001Sang, 469) Supreme Court Decision 2010Do14257 Decided June 30, 201, Supreme Court Decision 2015Do5046 Decided June 23, 2015

Defendant

Defendant

Daegu District Court Decision 2015No2525 decided September 2, 2016

The part of the judgment of the court below on the violation of the Act on Fraud and Subsidy Management shall be reversed, and that part of the case shall be remanded to the Daegu District Court.

The grounds of appeal are examined.

1. On the following grounds, the lower court found the Defendant guilty of violating the Act on Fraud and Subsidy Management among the facts charged in the instant case.

The Defendant, as the representative director of the farming corporation of this case, was designated as the 00 million won or more in order to receive the subsidy, and the capital should be secured at least 300 million won in the subsidy program (the above subsidy program is 300 million won), and the Defendant should be entitled to properly implement the subsidy program by securing other project sites. However, the farming corporation of this case did not own the capital of 10 million won, and did not own the project site, and the Defendant did not have the intent or ability to hold the capital and the project site. However, the Defendant submitted the project plan to Nonindicted 1, 200 million won in capital of the farming corporation of this case to Nonindicted 1, who is a public official in charge of 00 million won in the 2000,000,000 won in capital of the farming corporation of this case, and the Defendant submitted the project plan to obtain the approval of the instant subsidy program under the name of the 1st,000,0000,000,0000 won in the agricultural complex.

2. In short, the lower court submitted an application for approval of the instant case where the Defendant, through Nonindicted 1 of the public officials in charge of the ○○○○ Agricultural Livestock Industry and the public officials in charge of the said industry, submitted a false statement on capital, investment, and securing the project site through Nonindicted 1, thereby obtaining business approval as above by deceiving the public officials in charge of the Gyeongbuk-do livestock Industry and thereby, received subsidies by deceiving the public officials in charge of the ○○○ Agricultural Technology Center. However, such

A. The deception, which is a requirement for fraud, refers to all affirmative and passive acts that have to be complied with by each other in property transactional relations. It does not necessarily require false indication on the essential part of a juristic act, but should be relevant to the facts that form the basis of judgment to enable an actor to perform an act of disposal that he/she wishes by omitting the other party in error.

“False application or other unlawful means” under Article 40 of the Subsidy Management Act refers to the affirmative and passive act that may affect the decision-making with respect to the grant of subsidies by deceptive means or other unlawful means, even though the payment of subsidies under the Act is not possible through normal procedures (see, e.g., Supreme Court Decisions 9Do4101, Jan. 5, 2001; 2010Do14257, Jun. 30, 201; 2015Do5046, Jun. 23, 2015).

B. The record reveals the following circumstances.

(1) The documents attached to the application for approval of this case submitted to Nonindicted 1, who was drafted by Nonindicted 1, a public official in charge of the ○○○ Viewing and Viewing Livestock Administration, and submitted to Nonindicted 3, the public official in charge of the livestock management of the Gyeongbuk-do, are not entirely indicated.

(2) Although Nonindicted 1 stated in the above documents that the instant farming corporation had no “holding” the project site, it was not required to hold the project site when the instant farming corporation was selected as the subsidized project operator of the instant subsidized project and the instant farming corporation was not required to hold the project site in order to receive subsidies. Even if Nonindicted 3 or Nonindicted 1’s successor’s statement was based on Nonindicted 4, it is not necessary to hold the project site when the project site was secured by lease or approval for use.

(3) Nonindicted 3 stated to the effect that the public official in charge of ○○ City, who is an institution implementing the project, should confirm whether the agricultural partnership has secured capital or business sites, and that the contents of the project selected by ○○ City should be examined only as to whether the project conforms to the subsidized project.

(4) The Defendant stated to the effect that the amount of investment made by the members of the farming corporation of this case was KRW 600 million and the capital was KRW 600 million in the said business plan. It appears that there is no evidence to readily conclude that such statement was false. Therefore, it is difficult to readily conclude that the farming association of this case failed to secure the capital exceeding KRW 300 million, which is the funds to be used by the corporation for the subsidized project of this case.

(5) Even if following the relevant laws and regulations, it does not seem that the agricultural partnership does not seem to have stipulated “project site” as the qualification requirements for operating the instant subsidized project, and there is no evidence to readily conclude that the instant farming corporation failed to secure “the site for operating the instant subsidized project” at the time of the instant farming corporation.

(6) It is true that the total amount of the capital of the farming corporation of this case does not reach KRW 10 million. However, the defendant submitted the above business plan with the certified copy of the corporate register of the farming corporation of this case, which can be easily confirmed, as the total amount of the capital is stated in the above business plan, along with the certified copy of the corporate register of the farming corporation of this case. This is because the defendant prepared the above business plan with Non-Indicted 1, which is the public official of this case at the time of Non-Indicted 1, who is in charge of the public official of this case, and failed to examine whether there is any relevant provision requiring that the amount of the investment of the corporation be secured above 100 million and 100 million is not sufficient. In light of this, it is questionable whether the defendant could be said that the non-indicted 1, who was a public official of 000 city, did not meet the qualification requirements for the operation of the subsidized project of this case and submitted it to the public official in charge of Gyeongbuk-do.

C. Examining the above facts in light of the legal principles as seen earlier, it is difficult to find that the Defendant was granted subsidies by deceiving Nonindicted 2 of the public official in charge of the ○○○○○ Agricultural Technology Center on the premise that the Defendant had obtained business approval by deceiving Nonindicted 3 on the premise that he was obtained business approval by deceiving Nonindicted 3, on the part of the fact that the instant farming corporation was selected as the proprietor of the instant subsidized project through Nonindicted 1 and did not meet the qualification requirements for the capital, investment, capital, and project site for operating the subsidized project. Moreover, it is difficult to readily conclude that the Defendant was granted subsidies by deceiving Nonindicted 2 of the public official in charge of the ○○○○○ Agricultural Technology Center on the ground that the Defendant had obtained business approval

D. Nevertheless, the lower court erred by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on “the act of deception” in fraud and “the act of false application or other unlawful means” in violation of the Subsidy Management Act, thereby adversely affecting the conclusion of the judgment.

3. Therefore, the part of the judgment below regarding the Defendant’s violation of the Act on the Management of Fraud and Subsidy is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Min You-sook (Presiding Justice)