Defendant

More than anything else (prosecution) and prison sentence (public trial)

Law Firm Settlement, Attorney Lee Jae-hoon

Defendant shall be punished by imprisonment for a term of one year and six months.

The charge of evading compulsory execution among the facts charged in the instant case is acquitted.

The summary of the judgment of the acquittal part is publicly announced.

1) Criminal facts

The Defendant is a person who is working as the representative director of Nonindicted Co. 1 (hereinafter referred to as “Nonindicted Co. 1”) and has overall control over the business of the Defendant.

On June 14, 2016, the Defendant borrowed KRW 1.8 billion from Nonindicted 4 as the price for convertible bonds, and agreed to set up a fourth priority collective security (hereinafter “instant collective security”) in the name of the victim in Gangnam-gu Seoul ( Address omitted) that was owned by the Defendant as a security. On September 13, 2016, the Defendant received documents necessary for the establishment of the collective security from the victim, and thus, the Defendant had the duty to implement the registration procedure for the establishment of the instant collective security (hereinafter “the instant collective security”).

On December 15, 2016, the Defendant violated the foregoing duties, and caused the damage equivalent to the same amount to the victim by acquiring property benefits of KRW 475 million, which is the loss amount of the security value of the instant apartment, by granting the instant apartment in the name of Nonindicted Co. 2 (hereinafter “Nonindicted Co. 2”) by completing the priority collective security right at the office of Nonindicted Co. 1 located in Gangnam-gu Seoul Metropolitan Government (hereinafter “Nonindicted Co. 2”).

1. Partial statement of the defendant;

1. The witness Nonindicted 4’s legal statement

1. Some statements made by the prosecution against the accused in the suspect examination protocol (including the part concerning the statements made by Nonparty 4)

1. Each prosecutor’s statement about Nonindicted 4 and Nonindicted 3

1. Some of the statements made by the police interrogation protocol against the defendant (including the statements made by Nonparty 4 and Nonindicted 3 as to the defendant)

1. A bond subscription form (in case of Non-Indicted 1 Co., Ltd. five convertible bonds), a separate agreement, a certified copy of corporate register (in case of Non-Indicted 1 Co., Ltd.), a real estate copy (in case of address omitted), a promise to provide security, e-mail, security and a written consent of non-Indicted 1 Co. 3 sent, e-mail, security and pledge, consent of the pledge of stocks and voluntary disposal consent, data on output of apartment market

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

Article 355(2) and (1) of the Criminal Act (Selection of Imprisonment)

1. Summary of the assertion

A. The victim's investment in the victim's non-indicted 1's convertible bonds guarantees the payment of investment funds through the apartment of this case and the shares of non-indicted 1. Since the agreement on the establishment of the right to collateral security of this case is actually a promise to pay in substitutes, the defendant's duty to establish the right to collateral security against the victim does not fall under

B. The Defendant did not have any intention to inflict damage on the victim because it was based on the management judgment that set up the fourth priority mortgage on the apartment of this case to Nonindicted Company 2.

C. The Defendant has only 80% shares of the instant apartment, and the remainder is owned by Nonindicted 11 of the Defendant’s wife, and the Defendant’s property profit should be limited to the establishment of the fourth priority mortgage on the share of 80% out of the instant apartment.

2. Determination

A. Relevant legal principles

Inasmuch as the trust relationship with respect to the transfer of right to real estate and the need to protect such trust relationship are equally recognized as not only to a sales contract but also to other legal relations with the purpose of transferring or establishing the right to real estate. Therefore, the act of arbitrarily completing the registration of the establishment of a mortgage in the name of a third party without performing the duty to establish a mortgage despite the fact that the establishment of a mortgage is performed as collateral of the obligation constitutes a crime of breach of trust (see, e.g., Supreme Court Decisions 2007Do9328, Mar. 27, 2008; 2011Do1224, Nov. 10, 201). Meanwhile, the seller’s obligation to transfer ownership following the pre-sale of accord and satisfaction is not definitely established at the time of the pre-sale but also arises after the obligee exercised the right to complete the pre-sale. In light of the fact that in the case of dual mortgage as seen in this case, the seller’s obligation to establish a collateral and the seller’s obligation to manage the real estate again constitutes an intermediate payment of trust.

B. Specific determination

1) As to the assertion that the establishment agreement on the instant apartment is an accord and satisfaction reservation

In light of the following circumstances, ① the establishment of the right to collateral security, which generally has the nature of the right to collateral security, as a promise for payment in kind that takes place upon the exercise of the right to collateral security, is very exceptional as the same before the exercise of the right to collateral security, ② the Defendant made investments from the victim, which would have been delayed due to the Defendant’s circumstances. ③ The Defendant asserted that the instant agreement for collateral security security was not an accord for payment in kind in the case of the application for commencement of rehabilitation against Nonindicted Company 1 (Evidence record 577 pages). Therefore, the instant agreement cannot be deemed an accord for payment in kind. Therefore, the Defendant is obliged to set up the instant right to collateral security, and the Defendant’s act of not performing it without performing it in light of the above legal principles and arbitrarily completing the establishment of the right to collateral security under the name of a third party constitutes a crime of breach of trust. Therefore, the Defendant’s aforementioned assertion is difficult to accept.

2) As to the assertion that there was no intention to cause damage to the victim because of the business judgment, etc.

Supreme Court Decisions 2015Do12633 Decided November 9, 2017, and 2002Do3131 Decided October 28, 2004, etc., concerning “the legal doctrine of management judgment” cited by the Defendant, are related to the intent of breach of trust against the victimized company in the event that a corporate manager, etc. causes property damage to the company in the course of managing and managing the company, and cannot be invoked in the instant case where the Defendant, at his own discretion, has completed the registration of creation of a neighboring mortgage to a third party.

3) As to the assertion that the Defendant agreed to establish the creation of a new mortgage only with 80% shares out of the instant apartment.

The victim consistently agreed with the investigative agency to set up the right to set up the right to set up the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right to set the right.

1. The scope of punishment by law: Imprisonment for not more than five years;

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

[Determination of Punishment] Type 2 of Embezzlement: Embezzlement(10 million won to 500 million won)

【Determination of Recommendation Area】 Basic Area

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

3. Determination of sentence: Imprisonment with prison labor for a year and six months;

○ Unfavorable Conditions

The Defendant, while borrowing KRW 1.8 billion from the victim, agreed to establish the instant right to collateral security while making an agreement with the victim on the establishment of the instant right to collateral security, was over six months thereafter, and there was an agreement on the establishment of the right to collateral security with the third party for the collateral security of the company run by him/her, thereby causing loss to the victim. Such act of violation of the right to collateral security has been clearly indicated as objective evidence, and even in South Korea, the Defendant argued that it is difficult to accept as such, by mistake in this court, that the obligation to collateral security has not been fulfilled or that it is for the company run by himself/herself, and the victim did not consistently endeavor to recover any damage for a more than two years. After the instant case, the Defendant made efforts to enforce the right to collateral security against the victim or to prepare a notarial deed of cash loan for consumption. However, the attempt to enforce the compulsory execution by the victim was failed once more than six months, and the Defendant had to recover the damage by making it difficult to recover the Defendant’s mental damage from the Defendant’s past.

○ favorable circumstances

The victim recovered the total amount of KRW 460 million, which is the sum of principal and interest, through compulsory execution against Nonindicted Company 1 and Defendant’s property, and the Defendant repaid the total amount of KRW 15.3 million to the victim during the trial. There was no previous criminal record who was punished in excess of the same criminal records or fine before the instant case.

Considering the above circumstances and comprehensively taking into account the defendant's age, character and conduct, environment, family relationship, motive and background of the crime, means and method of the crime, and circumstances revealed in the records and arguments of this case, the punishment as ordered shall be determined.

1. Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (not guilty of Grounds);

A. Summary of the facts charged

As stated in the facts of the crime, the defendant, as to the apartment of this case, made a priority-mortgage 1.2 billion won with respect to the non-indicted 2 company, thereby gaining pecuniary benefits equivalent to 1.2 billion won with respect to the non-indicted 2 company and causing damage equivalent to the same amount to the victim.

B. Determination

1) Relevant legal principles

In order to obtain a loan from a third party, property benefits acquired by a person by deceiving a third party on real estate owned by the third party and allowing the third party to establish the right to collateral security to use the real estate owned by the third party as a collateral for the transaction with the third party. In addition, in order to determine whether the act constitutes a crime of breach of trust in cases where the person liable for establishing the right to collateral security has established the right to collateral security with a third party, the market price of the real estate at the time and the amount of the claim secured by the right to collateral should be calculated, and whether the act has lost the value of the security interest or the other party's damage acquired by the act of breach of trust which the person liable for establishing the right to collateral security has created and provided to the third party with the security interest or the loss of the real estate is equivalent to the value of the security interest acquired by using the third party as a collateral for the transaction with the third party. In calculating that amount, if there remains the value of the security interest or the loss of the real estate after the establishment of the right to collateral security with the third party, it cannot be included in property profits or losses (see, etc.

2) Specific determination

A) The market price at the time of committing the instant apartment.

At the time of the instant apartment from the Defendant to the investigative agency, the victim stated that the market price of the instant apartment was about five billion won, and the Defendant also stated to the same purport in this court. On July 18, 2017, the most adjacent to the instant apartment, in light of the fact that the purchase and sale of the apartment located on the Dong, the same area, and the similar floor as the instant apartment around July 18, 2017 (Evidence Record 607 pages), the market price at the time of the instant apartment can be recognized as five billion won.

B) The amount of secured debt at the time of committing the instant crime

With respect to the apartment of this case, it is recognized that the first priority right was established in the name of ○○ Bank, the second priority right of 1.3 billion won with the maximum debt amount, and in the name of △ Mutual Savings Bank, the second priority right of 1.3 billion won with the maximum debt amount, and the third priority right of 360 million won with the name of ○○ Bank, Inc. (Evidence record 294). However, according to the record, the Defendant stated in this court that, at the time of committing the crime, the secured debt amount of the first priority right of 1.75 billion won with the amount of the second priority right of 1.75 billion won, the third priority right of 3 billion won with the amount of the secured debt amount of 3 billion won with the aggregate of 3.0 billion won with the secured debt amount of 3 billion won with the statement of 1.3 billion won with the secured debt amount of 1.5 billion won with the statement of 3 billion won with the secured debt amount of 1.3 billion won with the written evidence of 201.3 billion won.

C) Property benefits or damages arising from the instant breach of trust

Based on the above market price and the secured debt amount, the remaining collateral value of the apartment of this case due to the act of breach of trust of this case is KRW 725 billion (i.e., the market value of the apartment of this case at the time of the crime - KRW 5 billion - the aggregate of the secured debt amount of the first priority right established on the apartment of this case - KRW 3 billion 1.25 billion - The secured debt amount of the fourth priority right of this case due to the act of breach of trust of this case is KRW 475 million (= the maximum debt amount of the fourth priority right of this case - the remaining collateral value of KRW 1.25 billion - the remaining collateral value of the property acquired by the defendant due to the act of breach of trust of this case). Thus, the evidence submitted by the prosecutor alone cannot be deemed as satisfying the constituent elements of Article 2(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes that “the criminal or a third party has acquired property profits.”

C. Conclusion

Thus, since this part of the facts charged constitutes a case where there is no proof of crime, it should be pronounced not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act, but as long as it is found guilty as stated in this part of the facts charged, it

2. Points on the evasion of compulsory execution;

A. Summary of the facts charged

around May 29, 2017, at the office of Nonindicted Company 1 located in Gangnam-gu Seoul (hereinafter omitted), the Defendant prepared an application for commencing rehabilitation procedures for Nonindicted Company 1 on the ground of the financial distress, etc. of Nonindicted Company 1 at the time, and prepared a notarial deed of a monetary loan agreement that recognizes compulsory execution on the part of Nonindicted Company 4, the debtor Nonindicted Company 1, and the defendant, the joint guarantor, on or around February 7, 2017, and May 13, 2017, Nonindicted Company 5, on the ground of nonperformance, was likely to be subject to compulsory execution, such as provisional seizure of the claim against Nonindicted Company 1 on the ground of nonperformance of obligation, and the market price of Nonindicted Company 1 kept in the above office, the market price of which was owned by Nonindicted Company 1, 1,000,000 won, which was kept in the custody of Nonindicted Company 2, 4, a specialized warehouse, and kept in the △△△△ Design.

B. Determination

On May 29, 2017, the Defendant instructed Nonindicted Company 1’s employee Nonindicted 8 to take the art works and photographs kept in the representative director’s office out of the outside via Nonindicted Company 10. On the same day, upon Nonindicted 4’s application, Nonindicted 4 was subject to compulsory execution of corporeal movables in the Defendant’s residence, but the Defendant did not initiate execution without cooperation, and thereafter, the Defendant attempted several times until June 14, 2016, but failed to implement execution by installing several locking devices in the front door. On June 16, 2016, the Defendant applied for corporate rehabilitation against Nonindicted Company 1, and applied for individual rehabilitation against the Defendant on June 22, 2016, it is doubtful that the Defendant carried out the art works and photographs kept in the representative director of Nonindicted Company 1 and stored them separately for the purpose of evading compulsory execution.

However, the following circumstances are as follows: ① Nonindicted 4 stated to the effect that “the Defendant was not subject to compulsory execution” in this court; ② Nonindicted 4 applied for a bond seizure and assignment order, etc. against the Defendant and Nonindicted Company 1 on May 16, 2017, but it appears that it was not served on the third obligor and the Defendant prior to the instant case due to such reasons as withdrawal from the error in the application form; ③ Nonindicted 4 prepared a notarial deed of a monetary loan contract containing the purport of recognizing compulsory execution on the Defendant’s obligation to Nonindicted 4 on February 7, 2017; however, Nonindicted 4 did not perform compulsory execution on February 28, 2017; ② Nonindicted 4 prepared a notarial deed containing the purport of recognizing the second compulsory execution on or around May 23, 2017, and Nonindicted 4 did not appear to have carried out the Defendant’s property as a place of compulsory execution on or before the date on which the Defendant had been actually carried out of the office’s photograph for the same purpose.

C. Conclusion

Thus, this part of the facts charged constitutes a case where there is no proof of a crime, and thus, is pronounced not guilty under the latter part of Article 325 of the Criminal Procedure Act, and the summary of the judgment of not guilty is published under the main sentence of

Judges Lee Young-hun (Presiding Judge)

1) Unlike the facts charged, regarding the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) among the facts charged in the instant case, property benefits or the amount of damages should be recognized. As such, based on the part found guilty by this court, some of the facts charged was revised to the extent that it

2) The prosecutor deemed the subject of acquiring the property benefits to be Nonindicted Co. 2, who received the fourth priority mortgage. However, insofar as the property benefits or losses incurred by the act of the instant breach of trust are deemed to be the amount equivalent to the secured value for the instant apartment, it is reasonable to deem that the person who acquired the property benefits has made it possible to use the amount equivalent to the secured value by setting up the collateral to a third party.

3) The claim is based on the Supreme Court en banc Decision 2014Do3363 Decided August 21, 2014, that the crime of breach of trust is not established in the event that an obligor who has entered into an accord and satisfaction promise on real estate for the purpose of collateral security disposes of real estate to a third party.

Note 4) see the victim’s legal statement.