2013Gohap892, 972 (Joint), 1390 (Joint)

(a) Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes;

(b) Embezzlement;

(c) Fraud;

(d) Larceny;

2014 initially 1003 Application for a compensation order

1. A. (c) d. A

2. A. B

3. (a) C

Isra, Kim Jong-sung, Kim Jong-soo, Kim Min-young, and Lee Ba-Ba (Trial)

Law Firm D, Attorney E

(for Defendant A)

Attorney F

(P) A national election for the defendant B

Law Firm G LLC, Attorneys H

Law Firm I, Attorney J

(For the defendant C)

K, L

Law Firm MU, Attorneys N,O, P

May 29, 2014

Defendant A shall be punished by imprisonment with prison labor for a crime of KRW 5 million, with prison labor for a crime of KRW 2 in its holding, and by a fine of KRW 5 million for a crime of KRW 3 in its holding.

Where a defendant A fails to pay the above fine, each of the above defendants shall be confined in a workhouse for the period calculated by converting 100,000 won into one day.

Of the facts charged against Defendant A, the charge of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

Defendant B and C are not guilty.

The summary of the judgment on Defendant B and C shall be published.

All of the applicants for compensation are dismissed.

Criminal facts

Defendant A was sentenced to 8 months of imprisonment for fraud at the Seoul Central District Court on February 10, 2009 and 2 years of suspended execution, and the above judgment was finalized on November 12, 2009. On June 15, 2012, Defendant A was sentenced to 1 year and 2 months of imprisonment for fraud and 2 years of suspended execution, and the above judgment became final and conclusive on June 23, 2012.

1. Defendant A’s embezzlement [2013 Highis892]

On October 11, 2007, Defendant A paid KRW 3,125,800 per month to the victim Filisung Capital Co., Ltd. (hereinafter referred to as “Filisung Capital”) and KRW 3,125,80 per month for 48 months. Until full payment of the lease amount is made, Defendant entered into a contract for leasing a vehicle to a third party under the condition that the said victim shall not engage in any act infringing on the rights of the victim, such as transfer of the vehicle to a third party, etc., and kept the said vehicle for the victim. On August 27, 2009, Defendant A embezzled it by transferring the said vehicle to R, which is five million won and more than five million won, in and near the street in the pressure-gu Seoul High-gu, Seoul High-gu, and embezzled it.

2. The Defendant A’s fraud [2013 Gohap972]

On October 13, 2010, Defendant A made a false statement to the victim S within 2 months of the interest on the third part of the month of the loan of 200 million won at the new-dong store in Gangnam-gu Seoul, Seoul. The defendant A made payment to the victim S within 2 months of the interest on the third part of the month. The son's son, who is a son of T Co., Ltd., will offer 49% of the stocks of U Co., Ltd., a son, as security.

However, the above shares had already been offered to another person as security for KRW 500 million, and the defendant A had no particular property and had no intent or ability to repay the above borrowed amount in time because there are many debts.

Defendant A deceiving the victim as such and transferred KRW 200,000 to the single bank account under the name of Defendant A on the same day.

3. The thief by Defendant A [2013 Many 1390]

Defendant A, around December 2012, 2012, hereinafter referred to as “W”), was accompanied by X 640 vehicles, which were owned by IMW Korea Co., Ltd. (hereinafter referred to as “W”) under the lease contract, and was on board from W’s representative.

On February 28, 2013, Defendant A provided the above car with a loan of KRW 47 million from the victim K and Z as collateral and provided it to the victims to possess and manage it. On March 5, 2013, Defendant A, who was parked in the underground parking lot, was driving the above car owned and managed by the victims in the new car in Seocho-gu Seoul AA building B (201) around March 5, 2013.

Summary of Evidence

[Fact 1 at the time of sale - 2013 Highis892]

1. Defendant A’s legal statement

1. Legal statement of the witness R;

1. The second written statement of the suspect interrogation protocol of the prosecution (including the part concerning the AB statement) against the defendant A

1. Entry of the chief executive officer (Evidence No. 1) in the complaint;

【Fact 2 at the time of sale - 2013 Highis972】

1. Defendant A’s legal statement

1. Legal statement of witness S;

1. Each description of a monetary loan for consumption, or a copy of passbook;

【Fact 3 at the time of sale - 2013 Highis1390】

1. Defendant A’s legal statement

1. Each legal statement of the witness K and Z;

1. Written agreement on the adopted vehicle custodian, investigative report (to hear statements of the owner of a vehicle), investigation report (to be submitted to the owner of a vehicle (related to the change of the registration certificate and the number of the vehicle); and

【Prior Records at the Time of Sales】

1. Each entry in investigation report (Attachment of Court Decision 2013Gohap892 to Suspects) (Attachment of Court Decision 2013Dahap892 to Criminal Suspects 33) (Evidence Nos. 2013 to 54) (Evidence Nos. 2013 to 2013 to 572);

Application of Statutes

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

Defendant A: Article 355(1) of the Criminal Act (the point of embezzlement, the choice of fines), Article 347(1) of the Criminal Act (the point of fraud, the choice of imprisonment), Article 329 of the Criminal Act (the point of larceny, the choice of fines)

1. Handling concurrent crimes;

Defendant A: The latter part of Articles 37 and 39(1) of the Criminal Act (the crime of embezzlement and November 12, 2009 between the crime of embezzlement, which became final and conclusive on November 12, 2009, and between fraud, which became final and conclusive on June 23, 2012)

1. Detention in a workhouse;

Defendant A: Articles 70(1) and 69(2) of the Criminal Act

1. Dismissal of an application for compensation order;

Articles 32(1) and 25(3)3 of the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings (in the case of K who is an application for compensation, the scope of liability for compensation is not clear. In the case of L who is an application for compensation, it does not constitute a victim of larceny in the judgment)

Reasons for sentencing

1. We examine the crime of embezzlement No. 1 of the holding. Defendant A caused damage of more than KRW 100,000 to the victim of the above vehicle by transferring the benz S550 vehicle under the circumstances where the lease fee of approximately KRW 80,000 remains. Defendant A committed the above crime even though he was convicted of the crime of forging an official document and was under suspension of execution due to the crime of forging an official document, etc. Defendant A committed the above crime. However, Defendant A’s repayment and the recovery of the above vehicle were completely recovered, and the filial capital is not wanting to be punished against Defendant A. In addition, the above crime of embezzlement is related to the crime of fraud that became final and conclusive on November 12, 2009 and the concurrent crime under the latter part of Article 37 of the Criminal Act, and thus the equity between the above crimes should be considered at the same time.

2. On November 19, 2012, the crime of fraud set forth in Article 2 of the judgment is committed in the period of suspension of execution after being convicted of a crime of fraud that became final and conclusive on November 12, 2009. The victimS provided two points of a total market price of KRW 100 million and provided two points of a joint and several surety in the situation where part of the amount of damage was repaid through the compulsory execution procedure against other joint and several sureties, and expressed an intention of not to punish Defendant A through the wife A, a petitioner’s agent. However, even up to now, AC wishes to a severe punishment against Defendant A because the actual damage was not recovered by Defendant A and his mother. However, the above crime of fraud is related to a concurrent crime set forth in the latter part of Article 37 of the Criminal Act with the judgment that became final and conclusive on June 23, 2012, and thus the equity should be considered at the same time.

3. We examine the theft of Article 3 of the judgment. Defendant A provided approximately KRW 47 million from the victim K and Z as collateral, and stolen vehicles by means of cutting down LP640 vehicles, which are possessed by the said victims. Defendant A also committed the said crime, during the period of the suspension of execution of imprisonment due to the final judgment on June 23, 2012, etc. Furthermore, Defendant A was committed during the period of the suspension of execution of imprisonment due to the crime of fraud, etc. Furthermore, Defendant A provided money to Z and used not to testify in the instant court. However, K and Z did not want to be punished against Defendant A upon repayment of all the damage inflicted by Defendant A.

4. Defendant A’s act of leasing a high-class car, etc., committed various property crimes and committed similar crimes while under suspension of the execution of another crime. Defendant A repeating a crime and attempted to escape a strict punishment through an agreement with the victim after the occurrence of the crime. In addition, Defendant A’s age, character and conduct, family relationship, and circumstances after the crime, etc. are considered as having been committed, and the sentence is determined as ordered by the disposition, comprehensively taking account of all the sentencing conditions, such as Defendant A’s age, character and conduct, family relationship, and circumstances after the crime.

The acquittal portion

1. Summary of the facts charged

Among the facts charged against Defendant A, the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and the summary of the facts charged against Defendant B and C are as follows.

around June 200, the Defendants conspired to acquire 30 billion won shares of Wizex Cpool (hereinafter referred to as “Wizex”), a mobile phone radio shock manufacturing company of the United States of America, but the funds which can be mobilized are only KRW 100 million, and there is no intention or ability to take over 30% shares of Wizex because of the lack of the ability to raise additional funds, so the U.S. company's 'U.S. company' made mobile phone radio shock and delivered to the hotel to the hotel on July 2009, and the Defendants borrowed KRW 500 million to the above company with the acquisition fund of KRW 500 million after 50 billion if the Defendants lent 50 million to the Habman on July 2009, the Defendants acquired the above company by adding the interest of KRW 500 million to the principal, and transferred the funds to the victim AF on the pretext of 300 billion on February 29, 200.

2. Determination

A. Fraud is established by deceiving another person into mistake and inducing a dispositive act, thereby obtaining property or pecuniary gain. It requires causation between deception, mistake, and property disposal act. On the other hand, whether a certain act constitutes deception that causes mistake to another person, and whether there exists causation between such deception and property disposal act should be determined generally and objectively in consideration of the transactional situation, the other party’s knowledge, character, experience, occupation, and other specific circumstances at the time of such act. Therefore, in a case where the Defendant’s act causing property disposal or property disposal is conducted under close relation with the victim’s failure or outcome of any business that the Defendant plans, the existence of deception or causation cannot be determined based on the Defendant’s financial power or credit status, and the relationship between the victim and the Defendant, the victim’s awareness and involvement in the pertinent business, the victim’s specific circumstance in which the victim made property disposal in relation to the pertinent business, the possibility of success of the pertinent business, and the victim’s experience and occupation, etc. should be determined comprehensively and objectively (see Supreme Court Decision 201Do81829, Oct. 13, 2011).

B. Comprehensively taking account of the following circumstances acknowledged by the evidence duly adopted and investigated by this court, the evidence submitted by the prosecutor alone is insufficient to recognize that the Defendants deceptioned AF as stated in this part of the facts charged, or that AF paid KRW 500 million to the Defendants due to such deception.

1) The substance of the mobile phone radio shock service and whether the Defendants’ aforementioned service was carried out

1) Dextrins are U.S. companies that have given a cell phone wireless impulses to the hotel.

AG 주식회사(대표 AH, 이하 'AG'라고 한다)는 위 휴대폰 무선충전기 사업 관련 투자를 담당한 업체이다. 휴대폰 무선충전기는 크게 전원에 연결되는 패드 부분과 휴대폰의 충전 단자에 연결되는 어댑터 부분으로 구성되는데, AI 주식회사(대표 AJ, 이하 'AI라고 한다)는 패드 부분의 제조를 담당하기로 한 업체이고, AK(대표 AL, 이하 'AK'이라고 한다)는 어댑터 부분의 제조를 담당하기로 한 업체이다.

② On April 6, 2009, AG entered into an investment contract with AG to pay USD 1,00,000,000 (hereinafter referred to as “$”) to AG, and to pay USD 2,00,000,000,00,000 (hereinafter referred to as “US”) to AG, if it delivers radio shocks completed to AG to the Dex through its relevant company, in addition to the investment amount and the profits of USD 1,00,000,000 (hereinafter referred to as “AG”).

③ On May 11, 2009, AI entered into a contract with 400,000 U.S. dollars at its maturity on August 15, 2009, with the rate of 15% per annum of 2009, and with the rate of 15% per annum. Accordingly, AG and AI leased USD 400,000 to AI, and AI immediately transfers the above borrowed amount to the foregoing Dex, and thereafter, AI entered into a contract with the effect that AI collects loans to the foregoing Dex immediately.

④ Defendant C, the representative of AM (hereinafter referred to as “AM”), was introduced into AO (hereinafter referred to as “AO”) (hereinafter referred to as “AO”), a company registered in a KOSDAQ-registered company, via a branch of AO. On May 25, 2009, Defendant C and AO, the representative director and the major shareholder of AO, paid KRW 4 billion in the manner of accepting or lending AO’s new convertible bonds, and AP paid USD 400,000 or KRW 50,000,000,000,000,000,000,000 won, and thereby, Defendant C and AP entered into a joint management contract for funding and joint management that Defendant C and AP jointly manage by carrying out a new project in AO.

⑤ AM와 AK, AG는 2009. 6. 1. AM가 AK, AG에 140만 달러를 투자하고, 투자금과 어댑터 매출금액의 7%에 해당하는 이익금을 지급받기로 하는 등의 투자계약을 체결하였다. 또한, AM와 AG, AI는 같은 날 AM가 AG와 AI로부터 AG의 위즈덱에 대한 2009. 4. 6.자 투자계약에 기한 100만 달러의 채권 및 AI의 위즈덱에 대한 2009. 5. 11.자 대여계약에 기한 40만 달러의 채권을 양도받는 내용의 계약을 체결하였다.

6) Defendant C became aware of Defendant A, Defendant B, and Q in the course of investing in AO. Defendant C introduced the instant mobile phone radio shocking electrical business to Defendant A, Defendant B, and Q. Accordingly, Defendant A invested in the said business by remitting KRW 100 million to AG on June 3, 2009, and Defendant B introduced AF he was aware of as an investor. The Defendants and Q introduced AF around June 2009, and recommended investment in AF in the said business.

7) At the time of soliciting investment to AF, the Defendants were actually running a mobile phone radio shock-related business with the plans of business, such as investment in the fexextrins through the acquisition of a domestic company or the acquisition of the fexexextrins.

2) Investment circumstances of AF

① At around June 2009, the Defendants introduced a mobile phone radio shocking business to AF and recommended investment, thereby guaranteeing 100% of the investment amount as well as the above investment contract between Epexex and AG. The AF states that, although the Defendants have given specific explanation on the radio shocking electric business, they do not memory the contents of the text, they are the same. In light of this, the Defendants are deemed to have explained the AF to the effect that the Defendants take over a certain company of Korea from the Defendants or merge with any company of Korea.

After the end of June, 2009, Defendant A, Defendant B, and Q agreed that AF shall pay KRW 500 million of the borrowed principal and KRW 500 million of the borrowed principal within 50 days out of L/C 3 million stated in the contract for the preservation of claims to AF at the end of the original time, and the borrower prepared a loan certificate described in Defendant A, B, Q, and Defendant C as a joint guarantor. AF decided to make an investment of KRW 500 million against the Defendants around that time.

(iii) details of use of investment funds;

① On June 2009, when the AO acceptance-related contract between Defendant C and AP was reversed, Defendant C requested the introduction of another recipient company to Defendant C.N received the representative AS(hereinafter referred to as “AS”) of AS(hereinafter referred to as “S”) that allows the acceptance of a shower (hereinafter referred to as “ssawer”) through AR which is a geographical area.

② On July 1, 2009, the Defendants and AT were to talk with the Defendants on July 1, 2009, but on July 1, 2009, Defendant C was subject to statutory detention for other cases by the Defendant C. Defendant C sent a phone call to his friendly AU by her friendly friendly friendly AU, thereby allowing AT to go together with Defendant A, Defendant B, and Q.

③ On July 1, 2009, Defendant A, Defendant B, Q, and AU visited Defendant C on July 1, 2009. The Defendants agreed to transfer part of the investment funds from AF to the account of Defendant C in receipt of the investment funds from AF.

④ AF transferred KRW 300 million to the AP’s account on July 2, 2009; Q transferred KRW 200 million among them to the Defendant’s account; and AU, which received passbook and seal imprint from Defendant C, transferred the said KRW 200 million to the AS account; and as AF transferred KRW 200 million to the AP’s account on July 3, 2009, AF transferred KRW 100 million among them to the Defendant’s account; and AU transferred the said KRW 100 million to the AS account.

⑤ Q returned KRW 100,000,000, out of KRW 300,000,000, which was transferred from AS account as seen above, and some of them were used to recover vehicles offered as security for the existing obligations of Defendant A and Defendant B. AT used part of KRW 300,000,000, which was transferred to AS account for the acquisition of the company, including showers, and used it as operating expenses of AS, such as AS office rent.

6. AT intended to arrange for a company subject to the acceptance of shower, etc. to Defendant A and Defendant B but failed to do so, and introduced AV (hereinafter referred to as “AV”) to Defendant A and Defendant B as a representative.

vii On July 14, 2009, Q transferred KRW 200 million to the account of AS. On the same day, Q transferred KRW 150 million to the account of AV on the same day, while the remaining KRW 30 million out of KRW 50 million was carried out in cash, and some of them were used as office rent, etc.

8 In the above process, the relationship between AK, AG and AI such as AL, AH and AW visited the office of AS and AV to have consultation with Defendant A, B by explaining the radio shock electrical business.

① Even after Defendant C was detained, both AF’s investment funds were transferred to the Defendants to the AS account at which the Defendants were the subject of receipt. This was for the investment in mobile phone radio shocking electric business through showers and AV companies, or the acquisition of the above share, and the investment funds of AF was scheduled to be used as the same name as that of the projects explained by the Defendants to AF.

① Although AS used part of AS’s investment funds under the name of AS rents, etc. in the process of using specific investment funds, the Defendants did not participate in the act of ATS, and instead attempted to file a complaint with Q to receive the refund thereof in the name of AS.

On the other hand, Defendant A, Defendant B, and Q returned KRW 100 million out of the investment funds of Defendant AF from the AF and used them as a security for the recovery, etc. of vehicles offered as security for the existing obligations of Defendant A and Defendant B. However, in light of the fact that Defendant A, Defendant B, and Defendant B were in custody of KRW 200 million out of the investment funds of Defendant AF up to July 14, 2009 as they were, it is difficult to view that Defendant A, Defendant B, and Q were planning to use some of the investment funds back from the time when they were to receive the investment funds from Party A to another place.

4) The Defendants’ possibility of running the mobile phone radio shock business and of returning the principal of the investment

① The relationship between AK, AG, and AI had an investment consultation with Defendant A and Defendant B in relation to the mobile phone radio filling service, but also had an agreement with another company, such as Co., Ltd. (hereinafter referred to as “Maternsch Rexroth”).

② Defendants A and B were issued by R on August 27, 2009 a KRW 500 million to enter into a contract with AK and AG with the content of taking part in the wireless shock electrical business. However, AK and AG refused to enter into a contract with AV on the ground that the contract was concluded with short liability and investment contract around that time (AL was merely provided with the same securities as BW from this court to August 27, 2009, not with check, but with warrant (BW). However, in light of the fact that Defendant B and B were issued KRW 100 million from R on August 27, 2009 to 200, Defendant B and C were to receive KRW 50 million from the above K 20,000, KRW 500,000 from the K 10,000,000, KRW 118 to 120,000 and KRW 27,000,00,000).

③ As such, although the Defendants used the AF’s investment funds to carry out the business under the same name as explained to AF, the Defendants were unable to smoothly carry out the radio charging business which the Defendants had been claimed due to various circumstances, such as the restriction of Defendant C, the failure of the company subject to AT acceptance, and the conclusion of the contract between AG and the short liability directorship.

④ On the other hand, the Defendants would have been able to set up the pertinent amount and return the principal of the investment to AF if some of the Defendants did not have any sudden action.

In other words, Defendant A received KRW 200 million from R on August 31, 2009, including KRW 50 million from ATS’s check and cash, and paid KRW 200 million. In addition, Defendant A and Defendant B filed a complaint under the name of Q to refund the amount used by AT from AT, and on January 7, 2010, Defendant A received 600 million convertible bonds issued by the Central PFT from AT to borrow KRW 300 million as security, with intent to borrow KRW 300 million. However, on January 7, 2010, Defendant A borrowed KRW 200 million convertible bonds from the above convertible bonds as security, but Defendant A and Q lost the convertible bonds, thereby having failed to use the said KRW 200 million as repayment to AF. Ultimately, Defendant A and Q returned KRW 200 million from R to AF, including KRW 700,000,000,000.

5) Recognition of the risks of mobile phone radio shocking service AF

AF did not hear the explanation of the radio shocking electric business from the Defendants and did not immediately determine the investment, and the first explanation was made after the lapse of a period of time from the time when the investment was made. AF received a loan certificate from Defendant A, Defendant B, and Q to the effect that KRW 500 million should be added to the investment amount of KRW 500 million within 50 days as seen earlier, and the Defendant A would have expressed the intent to guarantee the principal of the investment even through her parents if the business was erroneous. Accordingly, AF appears to have been fully aware of the risk of the radio shocking electric business.

6) Whether the Defendants deception and the causal relationship between deception and dispositive act exists

① In light of the aforementioned various circumstances, insofar as the Defendants used AF’s investment in the former mobile phone radio charging service as explained to AF, and the Defendants were the entity of the radio shocking electric business, it cannot be readily concluded that the Defendants deceptioned AF as stated in this part of the facts charged.

② In addition, as stated in this part of the facts charged, AF seems to have made an investment with the belief that the Defendants, as stated in this part of the facts charged, would not only have made an investment on the part of the Defendants that they will accept 30% of the shares of the Matriex, but also have believed to be able to obtain the profit of KRW 500,000,000, which is 100,000, and to guarantee the principal of the investment within 50 days, without sufficiently recognizing the risk of the radio shocking electric business. AF does not want to withdraw the complaint against the remaining Defendants except the Defendant A

3. Conclusion

In the end, this part of the facts charged constitutes a case where there is no proof of the facts charged, and thus, is pronounced not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act, and the summary of the judgment on Defendant B and C pursuant to Article 58

Freeboard of the presiding judge and judge

Judges Park So-young

Judges, Senior Superintendent-General