Defendant 1 and one other

Annasium

Law Firm Taeil, Attorneys Shin Man-sung et al.

Defendant 1 (Defendant 3 of the judgment of the Supreme Court) is punished by imprisonment with prison labor for two years and by imprisonment for three years for two years (Defendant 1 of the judgment of the Supreme Court and the judgment of the second instance).

[Case]

1. From December 29, 2005 to March 19, 2007, Defendant 1 was working as the representative director of the victim non-indicted 1 corporation (the trade name after the alteration: non-indicted 47 corporation; hereinafter "non-indicted 1 corporation") who is a KOSDAQ-registered company, and on December 23, 2009, the Seoul High Court sentenced three years of imprisonment and four years of suspended execution to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) at the Seoul High Court on December 23, 2009, and the above judgment was finalized on the 31st of the same month. Defendant 2, the de facto mother of Defendant 1, including the acquisition of 724,854 shares of the victim non-indicted 1 corporation on November 15, 2006, acquired 859,200 shares of the victim non-indicted 1 corporation on December 20, 2006, and owned 2124,754

A. Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) by the Defendants

Defendant 1, as the representative director of the victim non-indicted 1 corporation, has to preserve the above victim's property with the duty of due care as a good manager. When leasing the above victim's office, the office to recover the lease deposit at the time when the lease term expires should be confirmed in advance, and there was a duty to take all necessary measures to recover the lease deposit, such as receiving security equivalent to the lease deposit or securing senior rights.

However, around November 22, 2006, Defendant 1 requested Defendant 2, who was the actual manager of Nonindicted Company 17, at the office of Nonindicted Company 17 located in the Dongdaemun-gu Seoul Metropolitan Government (number 1 omitted) and four lots of ○○ building, Defendant 1 leased the whole three floors of ○○ building, which is the ownership of Nonindicted Company 17, to the said victim’s office.

However, during the period from February 25, 1997 to May 16, 2003, the right to collateral security equivalent to KRW 6.377,100,000 for five maximum debt amounts has been established between February 25, 1997 and May 16, 200. The provisional attachment registration of KRW 500,000 has been completed on June 13, 2003. The provisional attachment registration of KRW 500,00 was completed on November 9, 2004, and the auction procedure was in progress after the registration of voluntary decision on commencement of auction was completed on November 9, 2004. In that process, the lease deposit of KRW 2.2,70,000,00 was reported from 15 lessees of ○○ building, and it was difficult or difficult to obtain the lease deposit in full if the lease of the building was made.

Nevertheless, on November 22, 2006, Defendant 1 leased three floors of ○○ building from the office of Nonindicted Co. 17 to November 30, 2008, with set the lease period from December 1, 2006 to November 30, 2008, and issued a cashier’s checks of KRW 300 million to the representative director of Nonindicted Co. 17 Co. 35, and issued a down payment to Nonindicted Co. 17 Co. 35, the cash checks of KRW 700 million to the balance account of △△△ Bank on December 13, 2006.

Accordingly, the Defendants conspired to obtain pecuniary benefits equivalent to one billion won of the above lease deposit from Nonindicted Co. 1.7 and caused damages equivalent to the same amount to the above victims.

B. Defendants’ occupational embezzlement

On January 2, 2007, at the office of the above non-indicted 17 corporation, the defendant 1 borrowed 350 million won of the funds of the non-indicted 1 corporation from the defendant 2 and asked for the request. The defendant 1 delivered 350 million won of the funds of the non-indicted 1 corporation to the defendant 2.

Accordingly, the Defendants conspired and embezzled 350 million won of the above victim’s funds.

[Case of 2010Gohap1071]

2. From December 14, 2007, Defendant 2 served as the representative director of Non-Indicted 4 Stock Company since software development and sales business chain.

피고인 2는 2009. 3. 13.경 서울 서초구 서초2동 소재 ◆◆증권 강남역지점에서 공소외 28의 소개로 만나게 된 피해자 공소외 2에게 “우리 회사에서 전환사채를 발행하려고 하는데 투자를 해달라. 회사는 정상적으로 운영되고 있고 전혀 이상이 없다.”라는 취지로 말하고, 그 이후에도 공소외 28과 위 회사 부사장인 공소외 29를 통하여 피해자 공소외 2에게 투자를 부탁하며 “정기회계감사를 정상적으로 받고 있고, 아무런 문제가 없다”라는 취지로 거짓말을 하였다.

However, at the same time, Nonindicted Co. 4 was in a situation where various contingent liabilities occur, such as unreasonable loans in the process of acquisition and the embezzlement of company’s assets, etc. due to the occurrence of business losses due to sudden decline in sales, which led to the aggravation of financial conditions. Accordingly, it was unclear whether it is possible to convert the company into normal redemption or stocks even if the convertible bonds are issued, even if they were issued, due to the situation where it is unclear whether the accounting audit was suspended due to the failure to submit data and the lack of data on February 27, 2009.

Defendant 2, by deceiving Nonindicted 2 of the victim Nonindicted Party 2 through the above method, was obtained on March 20, 2009 from the victim Nonindicted Party 2 to acquire KRW 495,00 from the victim Nonindicted Party 2 as the price for acquiring convertible bonds issued by the said company.

Section 1-A(A) of the holding

1. Defendants’ respective legal statements

1. Each prosecutor's protocol of interrogation of each prosecutor's suspect against the Defendants

1. Each prosecutor's interrogation protocol on Nonindicted 35

1. Each prosecutor's statement against Defendant 2 of the judgment of Nonindicted 48 and the judgment of the second instance

1. Investigation report (Attachment to the current status of shares held by Defendant 2 by Nonindicted Co. 1) and report on the results of tracing the financial account;

1. Copy of corporate register;

1. A lease contract, transfer certificate, or a copy of a cashier's check (two pages of evidence);

1. A certified real estate register, a detailed statement of real estate property of the building for Nonindicted Co. 17, and documents additionally submitted;

1. Previous convictions in judgment: Criminal records and investigation reports (a copy of the judgment attached);

Section 1-b(b) of the holding

1. Defendants’ respective legal statements

1. Each prosecutor's protocol of interrogation of each prosecutor's suspect against the Defendants

1. Each prosecutor's interrogation protocol on Nonindicted 35

1. Each prosecutor's statement against Defendant 2 of the judgment of Nonindicted 48, 31, and 2

1. Investigation report (Attachment to the current status of shares held by Defendant 2 by Nonindicted Co. 1) and report on the results of tracing the financial account;

1. Investigation report (to listen to Nonindicted 49 monetary statements);

1. Copy of corporate register;

1. Short-term loan contract, copy of a cashier's check (two books of evidence 79 through 84 pages);

1. Previous convictions in judgment: Criminal records and investigation reports (a copy of the judgment attached);

Point 2 of Judgment

1. The defendant 2's partial statement

1. Each legal statement of the witness Nonindicted 2 and 50

1. Some statements made by the prosecutor concerning Defendant 2 in the interrogation protocol of the prosecution;

1. The prosecutor’s statement concerning Nonindicted 28

1. Copies of promissory notes;

1. Audit report, request for public disclosure of inquiry, and delisting;

1. △△ Accounting Corporation's reply;

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

Defendant 1: Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356, Article 355(2), Article 30 of the Criminal Act (the point of occupational breach of trust as of the date of sale), Article 356, Article 355(1), and Article 30 of the Criminal Act (the point of occupational embezzlement as of the date of sale and the choice of imprisonment)

Defendant 2: Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 356, 355(2), 30 of the Criminal Act (the crime of occupational breach of trust in the case of No. 1-A) and Articles 356, 355(1), and 30 of the Criminal Act (the crime of occupational embezzlement in the case of No. 1-B at the time of the market, the choice of imprisonment, and the above defendant do not have the status of keeping another person's property in the case of his duties, so the above defendant does not have the status of keeping another person's property in the case of his duties under the proviso to Article 33 and Article 50 of the Criminal Act, Article 347(1) of the Criminal Act (the crime of fraud and the choice of

1. Handling concurrent crimes;

Defendant 1: The latter part of Article 37 and the first sentence of Article 39(1) of the Criminal Act

1. Aggravation for concurrent crimes;

Article 37 (former part of Article 37, Article 38 (1) 2, and Article 50 of the Criminal Act [Defendant 1 is more severe than punishment, and Defendant 2 is more severe punishment and concurrent crimes with punishment prescribed in the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) with the largest punishment];

1. Discretionary mitigation;

Defendant 1: Articles 53 and 55(1)3 of the Criminal Act

1. As to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

A. The assertion

1) Defendant 1 and his defense counsel knew that the legal relationship of ○○ building was complicated, but they thought to be resolved immediately, and concluded a lease contract as stated in its holding by deeming that it is beneficial to the company, such as not paying monthly rent and management expenses, etc., and accordingly, they asserted that there was no intention of occupational breach of trust and illegal gains, and that there was no collusion with Defendant 2.

2) Defendant 2 and his defense counsel asserted that even though the voluntary auction procedure for ○○ building was in progress, it was concluded by temporary pressure, and that Nonindicted Co. 1 concluded a lease agreement by deeming that there was no problem about the recovery of deposit, and that there was no conspiracy with Defendant 1 or actively involved in the above crime.

B. Determination

1) In determining whether a manager had an intent to acquire intent to acquire intent to commit a breach of trust or an unlawful act in relation to business judgment, strict interpretation criteria for recognizing intent to commit a breach of trust shall be maintained only where it is recognized that the act is an intentional act under the awareness that the manager or a third party would obtain property benefits and that it would inflict loss on the principal, taking into account various circumstances, such as the developments and motive leading up to the business judgment in question, the contents of the business, the economic situation of the company, and the probability of incurring losses and obtaining profits. In short, if there is no such awareness, the mere fact that the principal suffered loss does not constitute an intentional act, the act of breach of trust cannot be held liable for the mere reason that it was negligent in holding liability or neglecting the duty of care. However, if the act of breach of trust as referred to in the crime of breach of trust did not perform an act expected to have been performed as a matter of course under the provisions of statutes, terms of contract or the principle of trust and good faith, or if it is expected that an act would have not been performed as a matter of course of course, whether it constitutes an act of trust or duty.

2) Comprehensively taking account of the following circumstances acknowledged by the evidence duly examined in this Court, Defendant 1’s intent to obtain occupational breach of trust and to obtain illegal gains is recognized as having concluded a lease contract as stated in its reasoning with the awareness that Defendant 2 would obtain property benefits and inflict damage on the victim Nonindicted Incorporated Company 1, and thus, Defendant 1’s intent to obtain occupational breach of trust and intent to obtain illegal gains can be recognized. In light of the relationship between the Defendants, the developments leading up to the conclusion of the lease contract, etc., the Defendants and the

① Defendant 1 had to renew the lease contract or enter into a new lease contract with the expiration of the lease term for the Samsungdong Office of Nonindicted Co. 1, and the lease area has increased while entering into the lease contract with Nonindicted Co. 17, and Defendant 1 had some aspects of the lease terms, such as not paying monthly rent ( even if there was an aspect for the victim Nonindicted Co. 1, the intention for Nonindicted Co. 1 is merely an incidental intention). Meanwhile, compared to the lease terms for the existing Samsungdong Office (a lease deposit amount of KRW 150 million, monthly rent of KRW 12 million, management fee of KRW 3 million), the lease deposit for the ○○○○ building has increased considerably in terms of KRW 1 billion.

② In ○○○ building, which is the object of lease at the time of concluding a lease contract with Nonindicted Co. 17, the registration of the establishment of a neighboring mortgage worth KRW 6.3777 billion and the provisional seizure equivalent to KRW 500 million was completed, as indicated in its reasoning, at the time of the conclusion of the lease contract with Nonindicted Co. 17, and the registration of the establishment of a neighboring mortgage worth KRW 500 million was completed, two of which was voluntarily decided to commence the auction procedure. In the process, when concluding the lease contract with the above ○○ building due to the lessee’s report on the deposit for lease, etc., it was extremely difficult

② Nonindicted Co. 17, the owner of ○○○ building, was merely 130 million won per month at the time of the conclusion of the above lease agreement, while the net income of Nonindicted Co. 17 was merely 130,000 won per month, the financial situation of making it difficult to pay wages to workers at KRW 100,000 per month, and the financing for the payment of promissory notes issued while using bonds was interrupted, and the three floors of ○○ building, which entered into the lease agreement, were not leased for at least four months after the termination of the previous lease agreement due to auction, etc.

④ Defendant 1 was working as the representative director of the victim non-indicted 1 corporation at the time of concluding the above lease agreement, but Defendant 2 was involved in the management of the above non-indicted 1 corporation, such as obtaining the final approval or direction on the important matters of the company, and was well aware of the circumstances of the above non-indicted 1 corporation. In light of the background leading up to Defendant 1 to become the representative director of the above non-indicted 1 corporation, and the relationship between the Defendants, it seems that Defendant 1 was virtually difficult for Defendant 2, a real manager, to demand Defendant 1 to lease the three floor of the ○○ building.

⑤ Defendant 1 also confirmed the complex relationship of rights, such as the progress of the auction procedure, with respect to the above ○○ building. However, Defendant 2’s request or instruction led to entering into the lease contract, and did not verify the progress of the auction procedure, etc. in the process. Moreover, Defendant 1 did not take measures such as requesting the provision of security or securing priority claims to secure the use of the leased object, the guarantee of profit, and the return of the lease deposit through consultation on the terms and conditions of lease, such as lease deposit or monthly rent, etc.

④ Defendant 2 used the above deposit amount of KRW 1 billion for the purpose of paying interest on bank loans or bonds without using it for the resolution of auction for ○○○ building. In light of the relationship between the Defendants, Defendant 1 also knew of the financial status at the time of Nonindicted 17, and the Defendants could continue the above auction procedure in the future in light of the legal relationship of ○○ building and the financial status of Nonindicted 17, etc. In this case, it seems that the victim Nonindicted 1 may make it difficult to recover the above deposit amount of KRW 1 billion at the auction procedure.

7) After that, on April 8, 2008, prior to the expiration of the above lease term, the ownership transfer registration was completed by winning a successful bid with the third party on April 8, 2008. The victim Nonindicted Co. 1 was ordered to three floors of the ○○ building on June 1, 2008 without refund of the above lease deposit, and there was no dividend of the lease deposit in the auction procedure.

2. As to occupational embezzlement

A. The assertion

1) Defendant 1 and his defense counsel asserted that the introduction by Defendant 2 would bring a benefit to Nonindicted Company 31, and they lent the company’s surplus funds to the company’s surplus funds, so there was no intent of embezzlement and illegal acquisition, and there was no conspiracy with Defendant 2.

2) Defendant 2 and his defense counsel asserted that they did not borrow money for personal purposes, but did not agree with Defendant 1.

B. Determination

1) In the crime of occupational embezzlement, the term "the intention of illegal acquisition" refers to the intention of disposing the property of another person that is in violation of his/her duties for the purpose of pursuing the benefit of himself/herself or a third party, such as the case of his/her own possession, and there is no intention of returning, compensating for, or preserving it later (see Supreme Court Decision 82Do75, Sept. 13, 1983).

2) Comprehensively taking account of the following circumstances acknowledged by the evidence duly examined in this court, the victim non-indicted 1 corporation was merely the appearance of lending money to non-indicted 31 formally, and in substance, Defendant 1 delivered the funds of the non-indicted 1 corporation to Defendant 2 at will for Defendant 2’s financing, so the intent of embezzlement and illegal acquisition can be recognized, and the public offering relationship can be sufficiently acknowledged in light of the relationship between the Defendants and the defense counsel, and thus, each of the above arguments by the Defendants and the defense counsel cannot be accepted.

① On January 2, 2007, Defendant 2 demanded or instructed Defendant 1 to lend KRW 350 million in the name of Nonindicted 31 in the name of Nonindicted 31,000, when he was under pressure by using a short-term bond of high interest. Accordingly, Defendant 1 decided to lend KRW 350,000 to the funds of the victim Nonindicted 1 corporation. However, around January 2, 2007, Defendant 2 issued a check issued in the funds of Nonindicted 1 corporation to Defendant 2 without internal procedures, such as holding a board of directors of Nonindicted 1 corporation or undergoing a resolution.

② While Defendant 1 served as the representative director of the victim non-indicted 1 corporation, Defendant 2 became the largest shareholder of the victim non-indicted 1 corporation from around December 20, 206, and took part in the overall operation of the non-indicted 1 corporation, such as ordering the important agenda items of the non-indicted 1 corporation and granting final approval therefor from around that time. In light of the relationship between the Defendants and the non-indicted 31, the relationship between the Defendants and the non-indicted 1 corporation and the defendant 2, and the circumstances leading up to lending of money, etc., Defendant 1 was sufficiently aware of the situation where Defendant 2’s financial soundness or lending of money as above, and it is difficult for Defendant 2 to refuse such demand or instruction.

③ In relation to the above loan, the “short-term loan agreement” (Evidence No. 78 pages) was drawn up with the content that the victim Nonindicted Co. 1 borrowed KRW 350 million from the victim Nonindicted Co. 1 to Nonindicted 31 on March 31, 2007 with a maturity of KRW 12% per annum. However, Nonindicted Co. 31 borrowed only the name at Defendant 2’s request without taking part in the above lending terms and conditions, and only prepared the said agreement in the form of a decision to lend the said money.

④ Defendant 2 directly received the above KRW 350 million and used it for the purpose of repaying bonds, etc., and even if Defendant 2 intended to return or repay the above money, it does not interfere with the recognition of the intention of unlawful acquisition.

3. As to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

A. The assertion

Defendant 2 and his defense counsel asserted that Defendant 2 did not actually participate in the business at the time of acquiring convertible bonds, Nonindicted Co. 4 was aware of or could not have been notified of the rejection of opinion as a result of the audit, and that Nonindicted Co. 2 was well aware of the financial difficulties of Nonindicted Co. 4 as an investment expert, and thus, there was no deception against the victim Nonindicted Co. 2.

B. Determination

1) Comprehensively taking into account the following circumstances acknowledged by the evidence duly examined in this Court, Defendant 2 could fully be recognized that Defendant 2 had received money in the name of the acquisition price of the above convertible bonds by deceiving Nonindicted 2 of the victim. Accordingly, the above assertion by Defendant 2 and the defense counsel is rejected.

① On December 14, 2007, Defendant 2 acquired the shares and the right of management of Nonindicted Co. 4 and took office as representative director. On December 17, 2007, Defendant 2 added Nonindicted Co. 4 to the personal debt amounting to KRW 19 billion as joint and several sureties, and issued a promissory note amounting to KRW 42.7 billion at the face value of the issuance of Nonindicted Co. 4 to the bond company on December 26, 2007. On March 26, 2008, due to the act of breach of trust and embezzlement, such as using the bonds in the name of Nonindicted Co. 4 for personal repayment, the management of the funds of Nonindicted Co. 4 was imprisoned and various contingent debts were generated.

② In addition, Nonindicted Co. 4 suffered operating losses and net losses due to a sudden decline in sales in around 2008, and around September 2008, financial circumstances such as workers’ wages, retirement allowances, etc. have deteriorated, and a considerable number of workers have retired from the company on January 2009 and were not operated normally.

③ From November 208, 2008 to conduct an interim audit for accounting audit in 2008, △△ Accounting Firm requested Nonindicted Co. 4 to prepare data necessary for regular accounting audit. Even after that, △△ Accounting Firm requested data while consulting on the accounting audit period. However, the evidentiary data, etc. on the balance by account field until February 27, 2009 were not submitted or were insufficient, and thus, the audit was not completed.

After that, despite the request for the supplementation of data made by △△ Accounting Firm several times, Nonindicted Co. 4 did not supplement the data necessary for the formation of audit opinion until the completion of the audit in March 2009, and did not submit the report on the operational status of internal accounting management system under the Act on External Audit of Stock Companies, and it could be difficult to form an opinion on the audit if it did not provide the data necessary for the above audit.

④ As a result, on March 23, 2009, Nonindicted Co. 4 was notified of the rejection of opinion, which is a reason for delisting, on the ground of the impossibility of performing audit procedures, such as the impossibility of performing audit procedures, the occurrence of net losses due to a sudden decline in sales, etc., the excess of current net assets of current liabilities, and the question of capacity to continue to exist due to the possibility of contingent liabilities, such as the case in progress, which is the result of the failure to keep the accounting records of the company and the insolvency of the internal control system, from the accounting accounting corporation, and thus, it was revoked on April 29 of the same year on March 24, 2009.

⑤ As the representative director of Nonindicted Co. 4, Defendant 2 was operating the said company on a substantial basis, such as receiving a report on the operating status of the company from time to time and approving important matters. As such, Defendant 2 recommended the acquisition of convertible bonds to the effect that the said company is operating normally without explaining or notifying the victim Nonindicted Co. 2 of the fact that the said company is operating in a normal manner, even though it could have sufficiently anticipated that the financial situation of Nonindicted Co. 4 at the time of issuing the convertible bonds was well known or that the financial situation of Nonindicted Co. 4 was in progress, etc. was reported, and that the financial situation of Nonindicted Co. 4

④ Meanwhile, as of March 16, 2009, Nonindicted Co. 4 announced the asset status of Nonindicted Co. 4 as “total asset amount of KRW 46 billion, total amount of KRW 15.4 billion, capital amount of KRW 12.8 billion, total amount of capital amount of KRW 30.6 billion,” and the victim Nonindicted Co. 2 decided whether to accept convertible bonds and the amount of acquisition thereof, etc. in consideration of the aforementioned publication.

However, according to the audit report prepared on March 23, 2009 by ○○ Accounting Corporation, the asset status of Nonindicted Co. 4 at the time of December 31, 2008 shall be evaluated as “total asset amounting to KRW 30.7 billion, total debt amounting to KRW 14.4 billion, capital amounting to KRW 12.8 billion, total capital amounting to KRW 16.3 billion,” and there is a significant difference in the contents of the public notice made on March 16, 2009. However, even if considering that the contents of the public notice made on March 16, 2009 by Nonindicted Co. 4 were to be changed according to the final public notice made on March 16, 2009, it is difficult to view that it properly reflects the asset status of the above company, and there is no evidence or material to confirm its propriety.

7) The victim non-indicted 2 did not properly grasp the asset status, etc. of the non-indicted 4 corporation at the time of acquiring the convertible bonds of the non-indicted 4 corporation, and did not anticipate the rejection of opinions in the accounting audit, and decided to acquire the convertible bonds with trust in a considerable portion of the disclosure made on March 16, 2009. However, if he knew of the circumstances, such as the contents of the disclosure are not entirely reflected in the current status of the above company and the failure to comply with the accounting corporation’s request for submission of data during the accounting audit process, it would have been likely that the non-indicted 2 did not accept the above convertible

1. Defendant 1

【Determination of Punishment】

A violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust): Type 3 (Where the amount of profit in breach of trust is at least 500 million won, but less than 5 billion won) from among the

Occupational Embezzlement: Type 2 (where the amount of profit of embezzlement is at least 100 million won, but less than 500 million won) from among the embezzlement and misappropriation crime group;

[Special Mitigation]

Members not subject to punishment

【Scope of Recommendation】

Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust): Reduction area, one year and six months to three years;

Occupational Embezzlement: Reduction Area, Above 10 months imprisonment;

【Application of Criteria for Multiple Crimes】

Method of aggravated concurrent crimes: One year to six months of imprisonment (where the sum of the amount of profit from embezzlement and breach of trust is at least five hundred million won, and less than five billion won);

【Determination of Sentence】

2 years of imprisonment;

【Free Circumstances】

Defendant 1 paid KRW 100 million to the victim non-indicted 1 corporation and additionally paid KRW 2.355 million to the victim non-indicted 1 corporation in installments over three years. The victim non-indicted 1 corporation revoked the complaint against the Defendants. Each of the crimes of this case was committed before the judgment became final and conclusive on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) of the first head of the judgment

【Unfavorable Circumstances】

The crime of this case was committed by Defendant 1, who used the company fund for the benefit of Defendant 2, as the representative director, regardless of the company's profit, and caused damage to the victim non-indicted corporation 1,350,000 won in total. The amount of damage was a large amount of damage as above, but the damage was not recovered in addition to KRW 100,000,000, and Defendant 1 was sentenced to two years of imprisonment and three years of suspended execution due to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) on October 21, 2005, and was sentenced to three years of suspended execution and four years of suspended execution on December 23, 2009. Defendant 1 committed each of the crimes of this case during the suspended execution period of the above judgment sentenced on October 21, 2005.

【Other Conditions】

The motive or circumstances leading to the instant crime, the place of use of the said money, the relation to the Defendants, age, character and conduct, environment, circumstances after the instant crime, etc.

2. Defendant 2

【Determination of Punishment】

A violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust): Type 3 (Where the amount of profit in breach of trust is at least 500 million won, but less than 5 billion won) from among the

Occupational Embezzlement: Type 2 (where the amount of profit of embezzlement is at least 100 million won, but less than 500 million won) from among the embezzlement and misappropriation crime group;

[Special Mitigation]

Members not subject to punishment

【Scope of Recommendation】

Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust): Reduction area, one year and six months to three years;

Occupational Embezzlement: Reduction Area, Imprisonment not more than 10 months;

【Application of Criteria for Multiple Crimes】

Method of aggravated concurrent crimes: One year to six months of imprisonment (where the sum of the amount of profit from embezzlement and breach of trust is at least five hundred million won, and less than five billion won);

Methods of aggravated concurrent crimes: Imprisonment with prison labor for not less than one year and six months (a concurrent crimes with crimes for which the sentencing criteria have not been set);

[Restrictions by the applicable punishment by law]

Imprisonment for not less than three years;

【Determination of Sentence】

Three years of imprisonment;

【Free Circumstances】

Defendant 1’s payment of KRW 100 million to the victim Nonindicted Co. 1 Company and additional KRW 2.355 million to the victim Nonindicted Co. 1 Company, agreed to cancel the complaint against the Defendants for three years, and Defendant 2 has no record of being punished for the same crime.

【Unfavorable Circumstances】

The crime of this case was committed by Defendant 2 by taking advantage of the control relationship with the victim non-indicted 1 corporation and the relation with Defendant 1, the representative director, for his own interest, thereby causing damage to the victim non-indicted 1 corporation by using the company fund regardless of the company's profit. The crime was committed by deceiving the financial situation of the non-indicted 17 corporation or the progress of the audit, etc. by deceiving the acquisition price of convertible bonds by deceiving the non-indicted 17 corporation and thereby deceiving the acquisition price of convertible bonds, and the damage was not recovered except KRW 10,500,000,000,000,000,0000,000,000,000,000,0000

【Other Conditions】

The motive or circumstances leading to the instant crime, the place of use of the said money, the relation to the Defendants, age, character and conduct, environment, circumstances after the instant crime, etc.

1. Summary of the facts charged

Defendant 2, in the manner described in paragraph (2) of the judgment, by deceiving Nonindicted 2 of the victim in the manner described in paragraph (2) of the judgment, obtained from Nonindicted 2 of the victim on March 20, 2009 KRW 990 million from the victim Nonindicted 2 of the victim and obtained it as the price for acquiring convertible bonds

2. Determination

A. According to the evidence duly examined in this court as stated in paragraph (2) of the judgment by Defendant 2, as to whether the acquisition price of convertible bonds exceeds KRW 495 million under the name of the acquisition price of convertible bonds, and KRW 990 million, the victim non-indicted 2 already agreed with Defendant 2 to accept the subscription price of the non-indicted 4 corporation as KRW 990 million before acquiring the convertible bonds on March 20, 2009, and again return to investors the above acquisition price of KRW 495 million. The victim non-indicted 2, who recruited investors pursuant to the above agreement and deposited KRW 995 million with the acquisition price of the above convertible bonds into the corporate account of non-indicted 4 corporation, can be recognized as having received refund of KRW 495 million among them and paid to investors.

B. In full view of the above facts, the process of acquiring convertible bonds and the process of determining the acquisition price thereof, 495 million won out of the acquisition price of convertible bonds, and the return to investors through non-indicted 2, the victim non-indicted 2 or investors did not separately specify the acquisition price of the returned convertible bonds, and the "amount of profit" under Article 3 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes means substantial amount of profit in light of the legislative intent, even if Defendant 2 returned part of the amount, it is difficult to recognize that the prosecutor provided the above convertible bonds with non-indicted 4 corporation account under the pretext of the above acquisition price of the above convertible bonds, even if it was paid to the non-indicted 2, 495 million won, and there is no other evidence to acknowledge that the prosecutor provided the above convertible bonds with the non-indicted 2 to acquire the above convertible bonds under the pretext of the prior agreement between the victim and the non-indicted 4.95 million won, and there is no other evidence to acknowledge that the defendant acquired and disposed of the above convertible bonds under the name of the victim.

C. Therefore, among the facts charged in this case against Defendant 2, the facts charged about the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) should be pronounced not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act because it falls under the case where there is no proof of crime. However, inasmuch as it is found that Defendant 2 was guilty of

Judges Jeon Man-tae (Presiding Judge)

(1) Defendant 2 claimed that the defrauded Nonindicted Party 2 was refunded KRW 125 million as a fee out of KRW 495 million. As such, Defendant 2 claimed that the defrauded amount was KRW 370 million ( KRW 495 million - KRW 125 million - KRW 495 million). However, in fraud involving the taking-off of property, if there is a delivery of property due to deception, it constitutes a crime of fraud by itself, thereby infringing on the victim’s property. Even if a reasonable price was paid or there was no damage to the entire property of the victim, even if a part of the cost was paid due to the failure to affect the establishment of the crime of fraud, the defrauded amount is not the difference between the value of the property that was given from the victim and the value of the property that was received (see Supreme Court Decision 2006Do7470, Jan. 25, 2007). As such, Nonindicted Party 2 received KRW 450,500,00 for the taking-over of the investment bonds by the victim.