Defendant

Prosecutor

For gambros

Attorney Ahn Byung-hee (National Ship)

Seoul Central District Court Decision 2009Gohap1573 Decided June 29, 2010

The judgment of the court below is reversed.

A defendant shall be punished by imprisonment for not less than one year and six months.

1. Summary of grounds for appeal;

The Defendant’s deception of the victim and the granting of the right to use the account of the instant shares constitutes property interests provided for in fraud. In fraud does not require real property damage to the other party in fraud. In this case, even though the victim suffered a substantial decrease in the balance of the account due to the Defendant’s stock transaction, the lower court erred by misapprehending the legal doctrine on fraud, or by misapprehending the structure of the instant crime, and by misapprehending the other facts charged, not guilty of the remainder of the facts charged. In addition, as long as the lower court recognized the Defendant’s deception, the crime of attempted fraud may be established at least without relation to the occurrence of the outcome, inasmuch as the lower court recognized the Defendant’s deception.

2. Summary of the facts charged around the instant case

On July 4, 2008, the Defendant made a false statement to the victim Non-Indicted 1 to the effect that “The amount of KRW 50 billion is paid to the shares investment using the stock management program (the stock management system) newly developed by conducting research for several years. When investing KRW 400 million, the Defendant paid KRW 10 million to the party’s profits to the party’s profits using the said program developed by him/her, and returned KRW 970 million to him/her after three years, and the operating profits shall be returned in half to one half, but at the expiration of six months, the Defendant would guarantee the principal and interest by paying the interest of the national bank deposit to the principal at the expiration of six months.”

However, in fact, the Defendant was in bad credit standing over KRW 120 million due to the Defendant’s debt on the bank account, and the monthly financial balance was less than KRW 120 million, and it was difficult to take account of financial circumstances, such as the absence of any property. There was no other fact that the Defendant used the aforementioned development program, and there was no intention or ability to pay the principal and interest to the victim even if the Defendant was able to receive the investment funds by iceing the investment using the stock development program. Moreover, there was no difference in the fact that the Defendant used the above program.

Accordingly, on July 11, 2008, the Defendant, by deceiving the victim, obtained the right to use the ○○○○○ branch account (Account Number 1 omitted) in the name of the victim, which was deposited in KRW 502,750,000 (cash KRW 333,00,000, 169,750, 169,000) under the name of the victim, and acquired the pecuniary benefits equivalent to KRW 502,750,00 in the market value.

3. Defendant and his defense counsel’s assertion

As stated in the facts charged of this case, there was no deception of the victim as stated in the facts charged of this case, and the defendant merely explained about the stock operation program developed by the defendant, and the victim suggested investment in advance based on his own judgment, and had sufficient economic power at the time of this case. In addition, since the defendant was only granted a right to use the HTS using the ID and HTS with respect to the stock account of this case, and did not have the right to transfer or withdraw money from the above stock account, it cannot be deemed that the defendant independently obtained the right to dispose of the stock account of this case without excluding Nonindicted 1. In this case, it cannot be deemed that there was the right to dispose of the stock account of this case, and since the victim suffered damage and did not obtain any profit at the time of the occurrence of damage, the victim did not meet the elements of fraud that would make the other party gain property profit.

4. The judgment of the court below

(a) Fact-finding;

The court below found the following facts based on the evidence duly examined and adopted by the court below.

1) In around 1974, the Defendant and Nonindicted Party 1 came to know in the course of carrying out the activities of the university department of the same church, and Nonindicted Party 1 went to the United States, who entered the Republic of Korea on July 2008, and went to the Republic of Korea, and attended a conference for the motives of the university department of the church that was going to the military during the course of worship and went to a long time.

2) After that, around July 4, 2008, the Defendant: “Around July 4, 2008, Nonindicted Party 1 met, or “A share management program newly developed by conducting research for several years (port share management system) to fill KRW 50 billion as a share investment. The Defendant said that the Defendant would pay KRW 10 million as a monthly profit in the current account using the said program developed by the Republic of Korea, and return KRW 970 million as a profit in the current account, and return the operating profit to KRW 100 million after three years; provided, however, that the Defendant would pay the interest on the deposit of the national bank to the principal and guarantee the principal and interest by paying the interest on the deposit of the national bank at the expiration of six months (Nonindicted Party 1’s witness inspection protocol 2, 3 pages).”

3) On July 9, 2008, Nonindicted Party 1 heard the above horses of the Defendant, and agreed with the Defendant as follows.

“A (only the defendant, hereinafter referred to as “the defendant”) and B (only the non-indicted 1, hereinafter referred to as “non-indicted 1”) shall jointly operate the account of the non-indicted 2 securities company (hereinafter referred to as “non-indicted 1”) in good faith and sincerity as follows in principle:

1. Investment amount: Non-Indicted 1 shall make an investment in the amount of KRW 1 billion.

2. Commencement date of business: July 10, 2008;

3. Stock appraisal: It shall be calculated as the closing date preceding the date of commencing the business;

4. Profit distribution: The profits accrued from the operation of the above account shall be distributed one-half in duplicate, and the non-indicted 1 shall pay the profits to the defendant every one month.

5.6. Omission

7. Guarantee of Principal: The Defendant evaluated the principal invested by Nonindicted Party 1 at the time six months have elapsed from the date of investment commencement, and if the principal loss occurred, the Defendant shall pay the interest on one-year term deposit in the National Bank to Nonindicted Party 1 on a six-month period from the date of business commencement and continue to make an investment.

8. Non-Indicted 1 must perform the order work in compliance with the Defendant’s instruction. When the Defendant deems it necessary, Non-Indicted 1 shall directly place an order and immediately notify Non-Indicted 1 of the order. (Evidence No. 14 pages)

4) Around July 10, 2008, Nonindicted Party 1 opened the instant share account in the name of Nonindicted Party 1 at the Nonindicted Party 2 securities company ○○○○○○○ store located in Yeongdeungpo-gu, Seoul (hereinafter omitted), and notified the Defendant of IDs and straws necessary for the HTS transaction of the instant share account so that the Defendant could use the said account at will. The balance as of July 11, 2008 of the said account was KRW 33,00,000 and the amount assessed as the ordinary share of the financial branch of Korea, KRW 31,10,000,000, and KRW 31,00,000,000, and KRW 138,000,000, KRW 50,000, KRW 10,000, KRW 10,000, KRW 50, KRW 50,507, KRW 7,505, etc. (hereinafter the witness examination statement).

5) After opening the instant stock account, locks ordering the Defendant to purchase shares directly with the advice of the Defendant, but thereafter, the Defendant informed the Defendant of the ID and ficials required for the said account HTS transaction, and had the Defendant directly purchase the shares. However, the Defendant did not have to withdraw money from the direct account because it was not the nominal holder of the said account, and there was no other fact that the Defendant did not obtain any profit from the operation of the said account (the inquiry results with the lower court’s ○○○○○ branch by Nonindicted 2 Securities Company, and Nonindicted 1’s 20 pages).

6) On August 7, 2008, the Defendant and Nonindicted Party 1 entered into an additional agreement with the following contents.

“1) By August 10, 2008, in the event that the above account evaluation amount exceeds KRW 400 million, the account evaluation amount of Nonindicted Party 1’s account shall be deposited in the account of Nonindicted Party 1 (hereinafter “Nonindicted Party 1”) on August 20, 2008, and the account evaluation amount of Nonindicted Party 1’s account shall be KRW 485,000,000.

2) By September 9, 2008, the amount assessed on the account of Nonindicted Party 1 until September 9, 2008 shall be KRW 520,000,000 per day by the same method as that of paragraph (1) below below the bottom.

3) By October 9, 2008, in the same manner as (1) 2) as the above evaluated amount to KRW 520,000,000 by the account of Nonindicted Party 1 by 520,000,000,000 in the account by 520,000 by 19,000 in the same manner (Evidence record 18, 19,00).

7) However, the balance of the instant stock account was reduced to KRW 404,848,529 as of August 18, 2008 (Evidence Record 21 pages).

8) When the balance of the instant share account sharply decreased and losses were incurred, Nonindicted Party 1 changed the ID and the par value of the instant share account on September 12, 2008 and prevented the Defendant from trading the shares (Evidence Records No. 128, Nonindicted Party 1’s Protocol of Examination of Witness).

9) The balance of the instant stock account was reduced to KRW 163,775,012 as of February 1, 2009 (Evidence Record 54 pages).

10) The Defendant did not have real estate owned by him, and the vehicle under the name of the Defendant was seized 57, and there was no real property value. The principal and interest of the loan were registered in 19 cases. Since 2004, the Defendant was registered as a bad credit holder (Evidence No. 90 pages, etc.).

11) On February 10, 2009, the Defendant issued to Nonindicted 1 a promissory note amounting to KRW 180,000,000 at face value, or a promissory note amounting to KRW 200,000 at face value (Evidence No. 62,67 pages).

B. Determination

According to the above facts, the court below held that the issue of this case is whether the defendant acquired property benefits through the non-indicted 1's disposal act, and whether there was the defendant's deception. According to the above facts, the defendant was punished for 50 billion won as an investment program developed by himself/herself, and if the defendant invests 400 million won, he/she would guarantee the profits of 10 million won per month, and even if the loss was caused, he/she would be guaranteed interest equivalent to the interest rate on time deposits for the National Bank, and the amount of 502,750,000 won is reduced continuously, and the defendant could not be granted the right to use the share account of this case to the non-indicted 1 for return of principal funds, and if the defendant did not have sufficient means to pay money to the non-indicted 1 for the non-indicted 1's disposal of stocks, it is recognized that the defendant would not have any other interest from the account holder of this case to the non-indicted 1's disposal of stocks, and that the defendant would not have any interest from the account of this case.

5. Judgment of the court below

A. First, in light of the records, the evidence of this case, among the facts charged in the instant case, was examined, and the facts that the Defendant was authorized to use the instant stock account (Account No. 2 omitted) opened in the name of the victim on August 18, 2008, by deceiving the victim as stated in the judgment of the court below, was changed to the shares account (Account No. 2 omitted) with the account number (Account No. 18, 21 omitted) opened in the name of the victim. It is sufficiently recognized.

B. Next, we examine whether the Defendant’s obtaining the right to use the instant stock account from the victim as a result of the said deception constitutes property interest in fraud itself.

The property interest as the object of fraud generally refers to the body of goods with economic value other than the property (the concept of economic property), and therefore, it is not clear that the acquisition of claims, the provision of labor services, the exemption of obligations, the postponement of performance of obligations, and other economic benefits are all obtained. Also, it does not necessarily require the acquisition of real property, but there is a property interest even in a situation where it is possible to obtain it in the future. Although there is a change after the fact, there is no effect on the establishment of fraud even if there is no benefit.

With respect to this case, the defendant received a password and ID of the victim's bank account in the name of the victim, and received at least the same transactional position and competence as the defendant who is the owner of the fund in the transaction of the shares. ② As a result, the defendant was able to operate the above share account independently without any financial cost, ③ in the event there was no agreement on remuneration for the management of the shares, the defendant agreed to receive the amount equivalent to 1/2 out of the amount, ④ in the event the acquisition of the bonds is recognized as property profit, ④ in the event the defendant directly received the bonds from the victim, and ⑤ in the event the defendant opened the bond account in the name of the defendant and made an investment in the shares, the defendant would not have any particular problem in calculating fraud even if it was not useful. In full view of the above, the defendant's granting the right to use the share account in this case and the economic substance are equal to the above case, and thus, it constitutes property profit as provided for in the crime of fraud.

C. Next, the judgment on the occurrence of damages against the victim is based on the fact that the crime of fraud is established by deceiving another person and acquiring property or pecuniary gain based on defective intent. The essence of the crime is the acquisition of property or pecuniary gain by deception, and it does not require that the other party actually suffers property loss (see Supreme Court Decision 2003Do7828, Apr. 9, 2004, etc.). As seen above, if the victim was deceiving the defendant from the defendant and obtained cash amounting to KRW 333,00,000, and KRW 169,750,000, which was deposited in the stock account of this case, and then notified the defendant of the ID and f9,750,000, which was granted the right to use the stock account of this case, so if the defendant obtained pecuniary gain by granting the right to use the stock account of this case, it does not affect the establishment of fraud even if there was no change in the victim's account at the time of acquiring the right to use the stock account of this case.

Furthermore, in the instant case, the victim deposited the deposit, etc. belonging to the stable financial assets in the stock account and entrusted the operation of the defendant, thereby resulting in loss of exposure to risks that may cause investment loss. Such loss of the victim’s property is considered to be in a logical causal relationship between the property profit acquired by deception and the right to use the stock account, i.e., the pecuniary profit acquired by deception by the defendant.

D. Lastly, as seen earlier, the Defendant did not acquire the right to manage and dispose of KRW 502,750,000 per se deposited in the instant stock account due to the instant fraud crime, but did not acquire the right to manage and dispose of the said money per se. This is merely a case where the above money cannot be calculated due to its nature. Accordingly, the Defendant’s pecuniary profit from the instant fraud crime constitutes a case where it is impossible to calculate its profit due to its nature. Accordingly, the Defendant’s pecuniary profit, which is not the KRW 502,750,000 as indicated in the primary facts charged, shall be deemed to be the amount on the market price stated in the ancillary facts

E. Therefore, comprehensively taking account of the victim’s statement and each agreement entered into between the Defendant and the victim, the Defendant’s ancillary charge is found guilty.

6. Conclusion

Therefore, since the prosecutor's appeal is well-grounded, the judgment of the court below is reversed in accordance with Article 364 (6) of the Criminal Procedure Act, and it is again decided as follows.

The facts charged by this court are the same as those concerning the ancillary facts in the above Paragraph 2.

1. Part of the defendant's oral statement at the court below

1. Statement by Non-Indicted 1 at the court of original instance

1. Partial statement of the prosecutor's protocol of interrogation of the defendant (including Nonindicted 1's statement)

1. Part of the statement of the police interrogation protocol of the defendant (including Nonindicted 1’s statement)

1. The police statement of Nonindicted Party 1

1. A certificate, each balance certificate, an additional agreement, details of the modification of the agreement, credit investigation report, credit investigation opinion, each promissory note, each investigation report, and a fact-finding certificate;

1. Article relevant to the facts constituting an offense and the selection of punishment;

Article 347 (1) of the Criminal Act (Selection of Imprisonment)

The fact that the defendant did not obtain personal benefits due to the crime of this case, in the case of stock investment, there is no risk of loss of principal, and that the defendant did not have any criminal record of the same kind or type of imprisonment in addition to the suspended sentence of imprisonment for the crime of offering of bribe in 194, the normal circumstances favorable to the defendant shall be considered.

However, the Defendant, as a result of the instant crime, suffered a large amount of loss that amounts to KRW 340,000,000 to the victim within a two-month period. Nevertheless, there is no effort to compensate for the victim’s loss up to the trial. Not only denies the entirety of the instant crime but also there is no reflectivity, such as transfer of the victim’s liability for investment loss, etc. In addition, taking into account all of the sentencing factors indicated in the instant case, such as the Defendant’s age, character and behavior, career, environment, the course and consequence of the instant crime, and circumstances following the instant crime, etc., the sentence

The summary of the facts charged in this case is identical to the part concerning the main facts charged in the above Paragraph (2). As seen in the above Paragraph (5) above, the facts charged in the above primary facts constitute a case where there is no proof of a crime and thus should be pronounced not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act. However, as long as it is found guilty of a crime of fraud

Judges Sung Sung-song(Presiding Judge)