2013Gohap372 Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)

The name of the crime, occupational embezzlement, and the severe punishment of the specific Economic Crimes

Violation of the Act on the Protection, etc. (Misappropriation)

A

Periodicals (prosecutions) and records of gambling (public trial)

Law Firm B

Attorney in charge C

February 7, 2014

A defendant shall be punished by imprisonment for one year.

However, the execution of the above punishment shall be suspended for two years from the date of the final judgment.

Among the facts charged in this case, each of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes is acquitted.

Criminal facts

The defendant served as the representative director of the victim D Co., Ltd. (hereinafter referred to as "D") in Scheon-si from December 13, 2005 to November 16, 2010, while the defendant served as the representative director of the said D Co., Ltd. (hereinafter referred to as "D"), who has overall control over the F Co., Ltd. related to the implementation of the F Co., Ltd. performed by E Co., Ltd., and who served as the representative director of G Co., Ltd. (hereinafter referred to as "G") for the purpose of golf course operation from September 10, 207 to January 30, 201.

On October 30, 2009, the Defendant borrowed KRW 300 million from G office operated by the Defendant in Gangnam-gu Seoul, Seoul, from G office, G Co., Ltd. (hereinafter referred to as “I”), and provided the victim D’s golf course membership with a face value of KRW 330 million.

Accordingly, the defendant embezzled the victim D's golf course membership amount of KRW 330 million with a face value of KRW 330 million.

Summary of Evidence

1. Partial statement of the defendant;

1. Each legal statement of the witness J, K, L and M;

1. Full certificates of registered matters, money borrowed certificates, requests for the repayment of debts and notification of disposal of membership rights, borrowed certificates and membership cards, details of use of I borrowed money amounting to 300 million won, copies of passbook, written statements, and related details of transactions;

Application of Statutes

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

Articles 356 and 355(1) of the Criminal Act; the choice of imprisonment

1. Suspension of execution;

Article 62(1) of the Criminal Act (The following consideration of favorable circumstances among the reasons for sentencing):

Judgment on the argument of the defendant and defense counsel

1. Summary of the assertion

Since it was impossible for the Defendant to bear a new obligation under the PF loan agreement, the Defendant merely received a loan under the name of G, and used the entire amount of KRW 300 million borrowed from I for D, and, in full sense, did not go through the board of directors, provided a golf club membership security after undergoing sufficient discussions with other directors, it cannot be evaluated as embezzlement.

2. Determination

In light of the following circumstances acknowledged by the evidence as above, ① KRW 1.6 billion was transferred from G to G bank account (N) on October 30, 2009, and KRW 300 million was transferred to 0 billion on the same day, ② The director J is a G subsidiary and paid KRW 200 million to P was used for acquiring another company. ③ Since G and D are separate corporations, it cannot be deemed that the Defendant used to acquire funds from G, and ④ the Defendant did not receive KRW 200,000,000,000 from G bank account on November 12, 2009 to 200,000,000 won was transferred to the Defendant’s account (see Supreme Court Decision 200,000,000,000 won). The Defendant’s assertion that the Defendant’s payment of KRW 200,000,000,000,000 won was paid to the Defendant’s account (see Supreme Court Decision 200,70,00,000).

Reasons for sentencing

1. The scope of applicable sentences: Imprisonment for one month to ten years;

2. Scope of recommended sentences according to the sentencing criteria;

[Determination of Punishment] Embezzlement and Breach of Trust, 100 million won or more to 500 million won

【Determination of Recommendation Area】 Basic Area

[Scope of Recommendation] One year to three years of imprisonment

3. Determination of sentence;

In light of the fact that the instant crime provided one copy of a golf course membership owned by a victim D, a separate corporation, as a security to secure KRW 300 million of the loan to G 1, and that the face value of the membership reaches KRW 330 million, etc., the Defendant should be punished strictly.

However, the defendant has no record of being sentenced to criminal punishment for the same crime (the record of being sentenced to a fine twice for the same crime), G appears not to be easy to clearly distinguish the actual business contents of the two companies from the victim D, and all sentencing factors specified in the arguments of this case, including the defendant's age, character and conduct, family environment, and circumstances after the crime, shall be determined as ordered by taking into comprehensive account all sentencing factors specified in the arguments of this case.

The acquittal portion

1. Summary of the facts charged

A. A. Around September 23, 2008, the Defendant deposited KRW 200 million from the Defendant’s bank account (V) in the U’s name of the victim D office in Scheon-si to WX-si for intermediate payment that the Defendant acquired by the Defendant’s individual from Jun. 24, 2006 to Oct. 11, 2010, as indicated in attached Table 1, the Defendant deposited KRW 8,811,942,807 for the Defendant or the Defendant’s operation G, and deposited KRW 200 million for the purpose of the Defendant or the Defendant’s operation G from May 17, 2006 to Oct. 15, 2010 as indicated in attached Table 2.

B. From January 20, 2010 to May 10 of the same year, the Defendant paid the landscaped construction cost for Y Co., Ltd. (hereinafter “Y”) at the victim D office located in Sacheon-si from January 20, 2010 to May 10 of the same year, instead of paying the construction cost of 6.732 billion won, the Defendant delivered to Z that operates Y a total of 68 copies of membership rights for the victim company (a total of 1.65 billion won) at the victim company’s golf course in lieu of paying the construction cost of 6.732 billion won.

However, in fact, the victim D paid the construction cost to other construction works in kind at the 90% price for golf course membership in the victim D's case of payment in kind as golf course membership, and even if Y should have paid in kind by applying the same standard as Y, the victim D paid in kind the construction cost to 60% price for golf course membership in the victim D's case of payment in kind without reasonable grounds.

As a result, the defendant violated his duties, thereby allowing Y to gain pecuniary advantage equivalent to 3.3666 billion won in the difference by paying the construction cost for Y arbitrarily at the level of 60% of the golf course sales price for the golf course of the victim company, and caused Y to obtain pecuniary loss equivalent to 3.366 billion won in the difference.

C. Around May 6, 2010, the Defendant borrowed seven memberships (a total of KRW 1.1555 million) of the victim D office in Sacheon-si from Y from Y, and entered into a monetary loan agreement with Y by borrowing KRW 700 million in cash from Y around June 16, 201, and the victim D as joint and several surety bears joint and several liability for KRW 1.855 million in total with Y.

As a result, the Defendant arbitrarily caused G to acquire property benefits of KRW 1.855 billion in total amount of debt toY in violation of his/her occupational duties, and caused the victim D to suffer property damage equivalent to that amount.

2. Summary of the defendant and his defense counsel's assertion

A. The point of embezzlement of corporate funds

The prosecutor does not specify what amount was deposited from the accounts D to which the defendant used for personal use, but rather prosecuted as embezzlement of the difference between the details of the withdrawal and the details of the deposit. Thus, this part of the facts charged cannot be deemed to be specified.

Even if the facts charged are specified, the details of withdrawals from the accounts managed by D and the details of deposits from such accounts are inaccurate, and the part that can be reflected in favor of the defendant was not reflected, and the liability of the defendant is not possible. Thus, if such contents are reflected, the difference as stated in this part of the facts charged exceeds the difference, it cannot be evaluated that the defendant embezzled the difference.

B. Breach of trust in relation to payment in kind

At the time of concluding a landscape construction contract with Y, the Defendant only set the payment rate for golf club membership into 90%, and did not participate in changing the payment rate to 60% as stated in the facts charged, and only the changed fact was finally known.

C. Breach of trust concerning joint and several sureties

Y 7 LF golf course memberships Y were paid as L's intermediate payment to be acquired by D, and used for D, and most of the cash KRW 700 million were deposited into D or used for D, so there was no property damage to D.

3. Determination

A. The point of embezzlement of corporate funds

1) Whether the facts charged are specified

The purpose of the law, which stipulates the date, time, place, and method of a crime, to specify the facts charged, is to facilitate the defendant's exercise of his/her right to defense. Thus, it is sufficient that the facts charged are stated to the extent that it can be distinguished from other facts by integrating these elements. Even if the date, time, place, method, etc. of a crime are not specified in the indictment, in light of the nature of the crime charged, the general indication is not contrary to the above degree, and it is inevitable in light of the nature of the crime charged, and if it is deemed that there is no obstacle to the defendant's exercise of his/her right to defense, the indictment cannot be deemed unlawful because the contents of the indictment are not specified. In the case of a general crime, even if the contents of the indictment are not specified specifically for each act forming part of the crime, the whole crime, the period and method of the crime, the number of crimes, the total amount of damages, and the victim or the other party are specified (see, e.g., Supreme Court Decision 97Do2609

This part of the facts charged is deemed to have been embezzled from the account managed by D to the use of D company funds for the G of the Defendant or the Defendant’s operation. Although this part of the facts charged is not specifically specified for individual embezzlement, the whole period and completion period of the crime, method of the crime, total amount of damages, victims, etc. are specified. In addition, the facts charged are deemed to have been specified since it was not interfered with the Defendant’s exercise of defense right, such as assertion of inaccurateness of the details of entrance and withdrawal in the course of pleading. Accordingly, this part of the argument by the Defendant and the defense counsel is rejected.

2) Whether the facts charged are proven

A prosecutor must prove that there is an act of embezzlement as an act of realizing the intent of unlawful acquisition. The burden of proof must be based on strict evidence with probative value that leads to a judge to have no reasonable doubt. If there is no such evidence, the doubt of guilt should be determined as the interest of the defendant even if the defendant is doubtful. If the defendant does not explain his/her whereabouts or use of money entrusted to him/her even though he/she was missing, it can be presumed that the defendant voluntarily consumed and embezzled the money. However, if the defendant explains the whereabouts or use of money on the ground that it is difficult to recognize the existence of an intent of unlawful acquisition, and materials fit for this, it cannot be found that the defendant embezzled money entrusted to him/her for another purpose, unless it is acknowledged that the defendant separately deposited or returned money for another purpose (see, e.g., Supreme Court Decision 9Do4989, Sept. 9, 194). 98, the court held that the defendant did not return the money entrusted to him/her as one of the grounds for criminal trials based on the difference between 90Do196, etc.

In full view of the aforementioned legal principles and the following circumstances acknowledged by the record of the instant case, it is difficult to deem that the Defendant embezzled the amount solely on the ground that the Defendant did not vindicate the difference between the withdrawn amount and the input amount. Therefore, the evidence submitted by the Prosecutor alone is difficult to deem that the Defendant embezzled the company fund of D without any reasonable doubt, and there is no other evidence to acknowledge this otherwise.

1. D has prepared an expenditure plan in consultation with lending banks and construction companies, and received membership purchase price by opening a joint account with D and E in order to pay expenses according to its expenditure plan. Accordingly, D has obtained approval for withdrawal of sale price from E, if operating funds are needed.

② The Defendant asserted that it was decided to create a separate account to receive membership purchase price through consultation with other directors because a separate account not controlled by E was required for smooth progress of the business, and that D's director and the head of the Construction Headquarters stated that D's decision to receive membership purchase price from "A shall undergo consultation with the Defendant and other directors", and that D's director AA, K, L, and J, including the Defendant, actively participated in the management of D's shares as well as actively participated in the management of D's shares, and in particular, it appears that the Defendant and the K, L, and J were living in the same workplace, and therefore discussed important matters related to D's operation from time to time, the Defendant created a separate account other than the joint name account in consultation with the financial director K, L, management director, and the head of the Judicial Headquarters of the Business Headquarters, and received the sale price from the above account and decided to use it as D's operating fund.

③ Although K, L, and J stated to the effect that “No prior consultation with the Defendant has been made with regard to the establishment of a separate account to receive the sale price,” it is difficult to change the revenue account for the sale price without the cooperation of K or L in charge of the sale of membership, which managed D’s funds, and in light of the fact that K, L, and J actively participated in the management of D’s shares and it is difficult to understand that it is difficult to allow the Defendant to continue to work as the representative director of D without raising any particular objection to the Defendant who voluntarily changed the revenue account for the sale price without consultation with them.

④ As such, inasmuch as the Defendant received the sale price in a separate account after consultation with other directors and decided to use it as operating funds of D, the difference between the amount of the withdrawal and the amount of the deposit in this part of the facts charged cannot be readily concluded to have been embezzled by the Defendant solely for that reason.

⑤ From July 2006, AB, in charge of D’s accounting and accounting, opened two or more accounts in the name of the bank in the name of the Republic of Korea, and opened two or more accounts in the name of the bank in the name of the bank in the name of the bank in the name of the bank in the name of the bank in the name of the bank in the name of the bank in the name of the bank in the name of AB upon request.

6. AB management of several accounts used for AB, including the bank account in the name of the D, arising from the bank account in the name of the D, and most of the accounts used for D were managed by K among the accounts used for D.

7) In this Court, AB mainly received instructions from K, a financial director, and when the Defendant, in Seoul, moved to a private office, reported the details that he spent to the Defendant, and it was time to make a verbal report even though the case was approved. In addition, when withdrawing cash from D’s account, K mainly delivered it to K, and K again delivered it to the Defendant is impossible to know himself.K also stated to the effect that the office rent, etc. in this Court may directly direct it according to the case, but if not, he reported it to the representative director and did not know it.

③ Ultimately, the account of D is not used by the Defendant in exclusive management, but is deemed to have been withdrawn according to the procedures set by the Defendant, K, and AB. As such, if the Defendant embezzled a large amount of company funds as stated in this part of the facts charged, K or AB would have immediately been known. Nevertheless, as the shareholder of D, K actively participating in the management did not raise any special objection for a considerable period in relation to the withdrawal of funds from the account or borrowed name account under the name of the Defendant.

9. The Defendant asserted that the funds paid to third parties, such as AE, AF, and AG, were used for D, among the funds stated in the statement of withdrawal, did not properly investigate whether the funds transferred in the name of third parties were used for purposes unrelated to D.

(10) Attached 1. The details of the withdrawal and Attached 2. The deposit money in Attached Form 4 appears to have been prepared by J and K, the complainants, and on March 10, 2009, around 15:44, G account transferred from 35 million won to the account under the name of K, and around 15:54 on the same day, the money transaction between several D and G or the Defendant was excluded from the withdrawal details of Attached 1. and the deposit details of Attached 2. In addition, it is merely a statement to the effect that J or K prepared the withdrawal details and the deposit details of Attached 1.4 after confirmation by the Defendant during the investigation process.

① In the filing of this part of the public prosecution, the prosecutor indicated the remittance of KRW 200 million from the K bank account (V) in the name of U managed in D to the NA account in the name of W payment. However, W, as seen below, on December 30, 2008, the trade name of X was affixed the seal of D’s other directors in the implementation agreement, and W appears to have been acquired at the company level. As such, the Defendant cannot be deemed to have embezzled the funds of D.

3) Sub-decisions

If so, this part of the facts charged should be pronounced not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act because there is no proof of a crime. However, as long as it is found guilty of embezzlement in the judgment that was instituted as a single comprehensive crime, the judgment of innocence shall not

B. Breach of trust in relation to payment in kind

1) The following circumstances acknowledged by the records of this case as follows: ① D has stipulated that, upon entering into a modified contract to extend the construction period between Y and Y on April 23, 2010, "6.6.6.0 to 30 June 2010, it first stipulated that "60% of the sales price at the time of repayment of membership" shall be calculated as 60% of the sales price at the time of payment of membership) the defendant, who was the representative director of D, concurrently worked as the head of the Construction Headquarters AA's C's C's C's C's C's C's C's C's C's C's C's C's C's 47 membership rights at the time of payment in kind; ② D's 21 membership rights at the golf club were issued to Y on April 30, 2010, and the defendant's 6's d's d's d's d's d's d's d'.

2) Determination as to whether an act of accord and satisfaction constitutes an act of breach of trust or the Defendant’s intent to obtain illegal gains with respect to the determination of whether the act of accord and satisfaction constitutes an act of breach of trust, shall be based on strict interpretation standards which recognize the intent of breach of trust only where it is acknowledged that the act of the Defendant or a third party is an intentional act under the awareness that an act of acquiring property benefits and that it would inflict loss on the principal by taking into account the circumstances such as motive, contents and progress of the business, economic situation faced by the company, probability of incurring losses and possibility of acquiring profits, etc. As such, it is difficult to acknowledge that the Defendant was not liable solely on the ground that there was an act of breach of trust or negligence on the part of the principal, as seen above, on the ground that the Defendant did not obtain or incur loss to the principal, on the ground that there was an act of breach of trust and good faith as seen above, and thus, it is difficult to recognize that certain act of the Defendant did not constitute an act of breach of trust and good faith at the level of 20% of business performance and its duty.

① At the time of this court’s “in this court, D’s Y and Y representative director agreed to the effect that D’s Y and Y’s Y were not enough to pay the price for landscaping construction in cash, and D’s Y were introduced to the Defendant and stated to the effect that D’s Y were similar to D’s Y and Y’s 2 billion won of credit construction work for three to four months. In the end, the landscape construction contract between D and Y was concluded in the process of physical coloring the company that will undertake large amount of credit construction work for a long time. In light of the background leading up to the conclusion of this contract, the Defendant’s Managerial judgment on the share of payment in kind should not be readily concluded as an act of breach of trust, insofar as it is deemed reasonable in economic aspect.

② Other directors of D (A, K, L, and J) stated to the effect that “D was unaware of the fact that it was due for payment in kind at the rate of 60% of membership purchase price in Y” in this court. However, L introduced Y representative director who was one’s own death village to the Defendant for a period of several months from January 20, 2010 to May 10, 2010, 68 membership rights of D were delivered to Y for payment in kind, and it is difficult to understand that K entered into a modified contract with 60% of the payment in kind in the process. In light of the fact that it was difficult for 20% of its signature on April 23, 2010, K concluded a modified contract, and it appears to have been issued 9D’s shares in the process of payment in kind, including the Defendant and 20% of its shares in D’s membership rights, as seen earlier, and it appears to have been given 0D’s shares in the process of payment in kind.

③ Although it is acknowledged that other related creditors, such as turry planting companies, AI artificial test companies, and AJ paid in kind at the ratio of 90% or 93% of golf course membership rights, the circumstances at the time of signing a contract do not coincide with each other. Thus, it cannot be readily concluded that payment in kind was made to Y at the ratio of 60% of golf course membership rights to Y without reasonable business judgment, and 2 also stated to the purport that the conversion rate may vary because payment in kind was made to Y except Y and E in the investigative agency for different circumstances.

④ In particular, D entered into a contract for the change of a construction contract with E, a contractor on June 18, 2008, with 60% rate of payment in kind, and even if E did not intend to receive payment in kind, as alleged by E, D’s view is at risk of payment in kind at a rate of 60%. Thus, it would be sufficiently possible to set the rate of payment in kind at 60% depending on D’s situation at the time of the contract or relationship with the contracting party.

⑤ In addition, in the case of golf club membership rights, the fluctuation in the market price is heavy compared to other assets, and the exchange rate falls. At the time, F did not have opened regularly. Since D’s financial situation was not smooth, it is likely that the value of golf club membership might seriously decline if the golf club development project is involved, the price would be maintained and the exchange rate is lower than that of the higher. Therefore, even in this respect, it seems difficult to evaluate the payment in kind made at the rate of 60% of the purchase price of membership by payment in excess of the reasonable business judgment.

3) Sub-decisions

Thus, this part of the facts charged against the defendant constitutes a case where there is no proof of crime, and thus, the defendant is acquitted under the latter part of Article 325 of the

C. Breach of trust concerning joint and several sureties

It is examined whether the defendant used 7 billion won in cash for D with 7 golf course membership borrowed from Y.

In full view of the following circumstances acknowledged by the records of the instant case, the Defendant appears to have used most of the golf course membership and cash KRW 700 million borrowed from Y for D. Therefore, the evidence submitted by the Prosecutor alone cannot be deemed to have been proven without reasonable doubt that the Defendant breached his duties in having D bear joint and several obligations with respect to Y, or that the Defendant was guilty of breach of trust, and there is no other evidence to acknowledge it otherwise.

① The executives of D, including the Defendant, concluded a contract for acquisition of shares and management rights with the content that they shall purchase W’s shares and management rights at KRW 16.5 billion on September 3, 2008 and pay the price by December 31, 2008. However, at the time, D entered into a contract for acquisition of ownership and management rights with the intent to promote D’s membership sales and to take over W for the purpose of using it for the golfel in the future.

② A director AA, L, K, and J, including the Defendant, completed a due diligence on the financial status, etc. of W for three days from September 10, 2008 to September 12, 2008, and written a mutual implementation agreement with D including the Defendant, stating that the remainder of W’s existing payments other than W’s KRW 300 million shall be substituted by the acceptance by the Defendant’s side of W’s existing obligations.

③ Under the mutual performance agreement, “AK et al. terminates the deposit pledge, etc. provided to the main office of the Korea Development Bank in connection with the L’s borrowing of financial rights.” The Defendant delivered 6 copies of 7 golf course membership from Y borrowed from Y to W (for each machine, DD lost and disposed of with the consent of Y) among 7 golf course memberships borrowed from Y. The Defendant sold them to an individual, prepared 90 million won, and used them for repayment of loans to WT.

④ In this regard, the J stated to the effect that the amount of debt exceeds that it tried to accept the actual intention, and that the management status is good, and that the Defendant paid the golf course membership to W at will, but K and L also stated to the effect that it is similar to this. However, in light of the fact that the mutual performance agreement prepared after completing a verification of the financial status of W as seen earlier, the director AA, L, K, and J’s seal affixed to D’s director, L, K, L, and J’s personal seal affixed to D’s mutual performance agreement, and that K, L, and J sent G a certificate of the content that the acquisition of all rights and rights to the contract was “D”, it is difficult to believe that W did not accept.

⑤ With respect to the specific details of the use of KRW 700 million borrowed from Y, the Defendant deposited KRW 700 million with G bank account (N) from Y on June 16, 2010, and transferred KRW 62 billion in total to D’s bank account (S) on 19 occasions from June 17, 2010 to June 30, 2010, and KRW 11), and KRW 20 million transferred to K’s account on 29 June 29, 2010, to NA’s account on 19 occasions, and KRW 50,000,000,000 transferred from Y to NA on 300,000,000,000 to NA on 305,000,000,000,000,000 to be used as security, can be evaluated to have been used for 305,000,000.

Thus, this part of the facts charged against the defendant constitutes a case where there is no proof of crime, and thus, the defendant is acquitted under the latter part of Article 325 of the

It is so decided as per Disposition for the above reasons.

Freeboard of the presiding judge;

Judges Seo-won

Judges 00 Efficacy

1) It is a different account from the account borrowed in the amount of KRW 300 million.

2) As to the court’s request for explanation, the prosecutor responded to the purport that the details of the withdrawal are merely materials explaining the circumstances leading to the embezzlement, not the specific embezzlement.

3) The parent-child of AB.

4) No. 500 to 517 of the investigation records

5) No. 147, 451 of the investigation records

6) No. 408 to 411 of the investigation records

7) Title 3 to 51 of the investigation records

8) No. 2 title 818 of the investigation records

9) No. 2, 938 of investigation records

10) Title 439 to 444 of investigation records

11) No. 470, 287 to 292 of the investigation records