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

(b) Fraud;

1. A. B.

2. B

Ack, scarlet (prosecution), but a record, a book democracy (public trial)

Law Firm C, Attorney D (Defendant A)

Law Firm E, Attorney F (Defendant A)

Attorney G (Defendant B)

November 15, 2018

[Defendant A] Defendant A shall be punished by imprisonment with prison labor for one year and six months, and a fine of KRW 10 million for the crime No. 2 in the holding.

Where the defendant fails to pay the above fine, the defendant shall be confined in the workhouse for 100 days: Provided, That the execution of imprisonment with prison labor for the crime No. 1 as stated in the judgment for three years from the date this judgment becomes final and conclusive shall be suspended. The defendant shall be ordered to pay an amount equivalent to the above fine.

[Defendant B I shall be punished by imprisonment for six months.]

However, the execution of the above punishment shall be suspended for one year from the date this judgment becomes final and conclusive.

Criminal facts

Defendant A was sentenced to two years of imprisonment by the Seoul High Court on October 21, 2010 due to a violation of the Financial Investment Services and Capital Markets Act, etc. on January 27, 201, and the execution of the sentence was terminated on October 7, 201, and on October 6, 2011, Defendant A was sentenced to 11 months of imprisonment with prison labor at the Seoul High Court for fraud, and the said judgment became final and conclusive on the 30th of the same month.

On March 21, 2014, Defendant B was sentenced to imprisonment with prison labor and two months at the Seoul Central District Court for fraud, and the said judgment became final and conclusive on April 1, 2014.

【Criminal Facts】

1. Defendant A

On March 24, 2009, around the time when the Defendant was working as the management manager of H (hereinafter “H”), on March 24, 2009, the Defendant stated that “If the Defendant borrowed KRW 500 million due to the maturity of H’s convertible bonds, the Defendant would pay KRW 100 million after one week after the maturity of H’s convertible bonds.” However, on February 9, 2009, the Defendant purchased KRW 1.5 billion shares held by the K&D Company, the largest shareholder of H (hereinafter “H”), and then purchased KRW 1.5 billion shares from the bond company, and then paid 1.5 billion shares to the five companies, and paid 1.5 billion shares to the bond company, and the Defendant did not have any possibility of de-listing the above capital due to H’s capital due to the total repayment to H, and there was no possibility of de-listing not only the victim’s intent but also the capital.

Nevertheless, the defendant deceivings the victim as above and acquired 500 million won from the victim as the borrowed money.

2. Defendants’ criminal conduct

Defendant B said, “A is a victim K who had been engaged in ordinary monetary transactions around February 15, 2012, while serving as a representative of the listed company, and at the same time, the amount of KRW 60 million will be paid at KRW 70 million if the listed company was leased to the company only for three days as the amount newly acquired is insufficient.” However, Defendant A did not have a plan to take over the listed company around that time, and the Defendants did not have any intent or ability to pay the borrowed amount of KRW 60 million within three days.

Nevertheless, on February 21, 2012, the Defendants prepared a notarial deed on February 24, 2012, 2012, at the Non-K office located in Seocho-gu Seoul Seocho-gu Seoul Seocho-gu, stating that they would repay the said money on February 24, 2012, which is three days after the victim K and acquired 60 million won from the victim K as the borrowed money.

3. Defendant B

On March 9, 2012, the Defendant: “Around March 9, 2012, the Defendant agreed to pay KRW 5 million,000,000,000,000,000,000,000, which was agreed to pay prior to the establishment of the right to collateral security, with the support of KRW 5,000,000,000,000,000,000,000,000,000, which was agreed to be paid immediately after the establishment of the right to collateral security.” However, not only did the real estate secured by the Defendant, but also

Nevertheless, as above, the Defendant deceiving the Victim K and obtained 5 million won from the Victim K and acquired it by fraud.

Summary of Evidence

1. Defendants’ respective legal statements

1. Part of the witness A’s legal statement (limited to the defendant B), and part of the witness B’s legal statement (limited to the defendant A);

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

1. Each prosecutor's protocol of interrogation of the Defendants (including the replacement part of K)

1. Each protocol of interrogation of the police against the Defendants (including each substitute part of K and J)

1. Of the interrogation protocol of the police against the Defendants

1. Each prosecutor's statement to K and J;

1. Each police statement to K and J;

1. Written statements of K and J;

1. A statement of the details of deposit and withdrawal transactions: A statement of the details of the deposit and withdrawal transactions: The remittance of KRW 5 million on March 9, 2012, the written application for coal transfer, the results of search and seizure, and the receipt of loans: The details of deposit and withdrawal transactions: March 24, 2009; the details of deposit and withdrawal transactions: March 24, 2009; each letter, and the authentic copy: February 21, 2012; the statement of the details of deposit and withdrawal transactions: A statement of the deposit and withdrawal transactions:

1. Previous convictions in judgment: Criminal records, inquiry of summary information of cases, investigation reports (report on the current status of release from a detention house in the Southern House of a Suspect), and personal confinement;

1. Application of a copy of the judgment or criminal judgment (the first instance court) and statutes;

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

A. Defendant A: Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (amended by Act No. 11304, Feb. 10, 2012); Article 347(1) of the Criminal Act (amended by Act No. 11304, Feb. 10, 201); Article 347(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (amended by Act No. 11304, Feb. 10, 201); Article 42 of the former Criminal Act (amended by Act No. 10259, Apr. 15, 201); Article 347

B. Defendant B: Articles 347(1) and 30 (the fraud of Paragraph (2) at the time of sale, the choice of imprisonment), and Article 347(1) of the Criminal Act (the fraud of Paragraph (3) at the time of sale, and the choice of imprisonment)

1. Handling concurrent crimes;

A. Defendant A: The crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and the crime of violation of the Financial Investment Services and Capital Markets Act for which judgment has become final and conclusive, and between fraud and fraud for which judgment has become final and conclusive)

B. Defendant B: the latter part of Articles 37 and 39(1) of the Criminal Act (Mutually between the crimes and the crimes of fraud for which judgment has become final and conclusive)

1. Aggravation for concurrent crimes;

(a) Defendant B: the former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act (Aggravation of concurrent crimes with the punishment stipulated in paragraph (2) of the same Article, which is heavier than the punishment)

1. Discretionary mitigation;

A. Defendant A: Articles 53 and 55(1)3 of the Criminal Act [the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud]

1. Detention in a workhouse;

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

1. Suspension of execution;

(a) Defendant A: Article 62(1) of the Criminal Act (the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

B. Defendant B: Article 62(1) of the Criminal Act

1. Order of provisional payment;

A. Defendant A: Judgment on the assertion by the Defendants and the defense counsel under Article 334(1) of the Criminal Procedure Act

1. Summary of the assertion

A. Although the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud), there was no fact that the victim J borrowed KRW 500 million from the victim J, there was no fact that it intended to repay it within one week, and there was no fact that it was used in the process, and there was no deception. In addition, even though the Defendant had the ability to repay at the time of borrowing, but it was detained by the Defendant A, there was no intention of defraudation.

B. As to Paragraph 2 of the holding

1) Defendant A

Although there was a fact that the victim K borrowed KRW 60 million from the victim K, it was not borrowed for the acquisition of the listed company, but borrowed it for the real estate purchase fund located in Gyeonggi-gun, and used it for the above purpose, there was no intention of deception and fraud. In addition, there was no fact that there was a conspiracy with B since B received the above money by suggesting that B will acquire the said money from the real estate in the process of borrowing.

2) Inasmuch as Defendant BA introduced A to the Victim K with the belief that it had the ability to repay with the intent to repay, it is merely a mere introduction of Defendant BA to the victim K, there was no intention of deception and deception, and there was no fact of conspiracy with A.

2. Relevant legal principles

A. The deception, which is a requirement for fraud, refers to all affirmative and passive acts that have a good faith and sincerity to observe each other in property transaction. It is sufficient to say that the deception does not necessarily require false indication as to the important part of a juristic act, but rather constitutes the basis of judgment for making an actor take a disposition of property which he/she wishes by omitting the other party into mistake (see, e.g., Supreme Court Decision 2011Do1856, Jan. 16, 2014).

B. Unless the defendant makes a confession, the intention of the defraudation, which is the constituent element of the crime, shall be determined by taking into account the objective circumstances such as the Defendant’s financial power, environment, details of the crime, and the process of performing the transaction before and after the crime (see, e.g., Supreme Court Decision 2003Do5382, Sept. 15, 2005). In a civil monetary lending relationship, the intention of the defraudation of the borrowed money can not be immediately acknowledged with the non-performance of obligation in the civil lending relationship, but in a case where the Defendant borrows the borrowed money by pretending to repay the money even though the Defendant did not have the intent to repay or is unable to repay within the due date for repayment as agreed upon (see, e.g., Supreme Court Decision 2017Do20682, Aug.

A. In light of the following circumstances acknowledged by the evidence duly examined by this court regarding the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud), Defendant A can be recognized as the fact of deceiving the victim J and deceiving 500 million won as if he did not have the intent or ability to repay within the due date of payment promised at the time of borrowing, and the intention to defraud 50 million won can also be sufficiently recognized. Accordingly, Defendant A and the defense counsel's above assertion is not accepted.

① The victim J consistently stated that Defendant A may repay KRW 500 million within one week from the investigative agency to the present court. At the time of borrowing the loan, Defendant A and the victim J stated that “The 500 million Won of the interest of KRW 500,000 shall be paid when the principal was sold on April 20, 209.” The victim J urged Defendant A to repay the above loan more than once, and during that process, Defendant A would have been able to repay the loan within one week, and the 50,000 won of the interest of KRW 50,000 of the H stocks after borrowing KRW 60,000,000 shall be paid when the principal was sold on April 20, 209. In full view of the fact that Defendant A demanded the payment of KRW 50,000,000,0000 from KRW 30,000,000,000,000,000 from KRW 30,00,00,00.

② Around December 2008, Defendant A entered into a contract with the acquisition of H shares in KRW 11 billion with the purchase of H shares from K&com, the largest shareholder of H. A. Defendant A, without making any investment in its own funds, offered capital by lending KRW 15 billion from bond business operators to five companies, and paid the above KRW 15 billion to the bond business operators as if he/she paid the advance payment of KRW 3 billion. In addition, Defendant A entered into a false investment agreement with the purport that H would lend KRW 19.5 billion to L on May 26, 2009, and transferred KRW 4.3 billion to L until June 2009, and kept the said amount after money laundering. In light of the aforementioned circumstances, Defendant A’s funds cannot be said to have been repaid within the short period of time by the victim or the beneficiary’s share acquisition.

③ Defendant 1 asserts that the victim J used KRW 500,000 as the bond repayment fund for preemptive rights to new shares, and that since H had sufficient financial capacity, the victim J could have repaid the above loan amount with the funds of H. However, in light of the following circumstances, it is difficult to view that H had sufficient financial capacity to repay KRW 500,000 to the victim J. 1 or within the short period corresponding thereto. 7 billion in total assets of H in 209 or KRW 39.8 billion in cash and cash assets, which could be used for immediate repayment, were only KRW 27 billion in total, or KRW 1,700,000 in total, KRW 1,000 in total, and KRW 2,50,000 in total, KRW 1,000 in total, KRW 2,500 in total,00 in total, KRW 1,000 in total, KRW 2,500 in total, and KRW 1,500 in total,00 in total,00.

B. As to Paragraph 2 of the holding

1) Determination on the intent of deception and deception

In light of the following circumstances acknowledged by the evidence duly investigated by this court, the defendants can be recognized as the fact that the defendants deceptioned the victim K as if they were to repay without the intent or ability to repay within the due date, and acquired the money as the acquisition fund of the listed company, and the intent of the defraudation can also be sufficiently recognized. Therefore, the above assertion by the defendants and the defense counsel cannot be accepted.

A) Whether the listed company is nominal of the acquisition fund of the listed company

The victim K consistently received a proposal from the investigative agency to this court that "the defendant Gap intends to take over the listed company in the form of a sum of KRW 60 million,00,000,000,000,000 as interest per three days if he/she borrowed from the defendant Eul to use the listed company in the form of a sum of KRW 10,000,000,000,000,000 as interest per three days." The victim K stated to the effect that the defendant Eul used to take over the listed company and returned to the listed company only three days after confirming whether he/she was able to use it in the form of a sum of KRW 60,00,000,000.

Defendant B also stated that Defendant B was able to talk about the acquisition of the listed company by Defendant A to the victim K several times, and that Defendant A was able to obtain a high-priced real estate from the son, and that Defendant A was able to obtain a loan of KRW 600 million from the bank by creating a collateral security right on the real estate and to obtain a loan of KRW 60 million from the bank, and the victim K was able to obtain a loan of KRW 60 million as the down payment for real estate purchase (Evidence No. 43 No. 48 of the No. 43 of the No. 1). The purport of Defendant B also is that the real estate purchase fund claimed by the Defendants was used for the acquisition of the listed company. Thus, the victim K’s statement to the effect that the purpose of the loan was explained as the acquisition fund of the listed company is sufficiently

After introducing Defendant A from Defendant B, the victim K borrowed KRW 60 million without making detailed confirmation, which was introduced by Defendant B to the victim K as an expert in M&A (M&A), and Defendant A also introduced that Defendant A was the representative director of the listed company as the listed company. The victim K believed that Defendant A, who had a representative director of the listed company, was able to take over the listed company at the same time.

If the Defendants were to have lent the real estate acquisition fund to the victim K, the victim K was to have followed the process of checking the copy of the register of the real estate that the Defendants intended to purchase or visiting the real estate site. However, such circumstance does not seem to be all.

B) In determining whether the Defendants had the intent or ability to repay with respect to this part of the facts charged, the most key issue is whether the Defendants had the intent or ability to repay the loan amount of KRW 60 million within 3 days (the most significant reason for the Defendant’s K to lend KRW 60 million, which was kept for the purpose of marriage of his/her father without being provided with any particular security from the Defendants, is that the Defendants paid the above money within 3 days and paid the interest of KRW 10 million to the Defendants. Accordingly, even a notarized deed prepared at the time of borrowing is written on February 24, 2012, which is 3 days after the date of borrowing).

However, at the time of borrowing, the Defendants did not properly set out a specific business plan to repay the above KRW 60 million within 3 days. In other words, as alleged by the Defendants, the entity of the listed company, which the Defendants intended to acquire at the time, was ambiguous, and the plans to prepare the acquisition price of the listed company by providing real estate as security after purchasing the real estate as well as by providing the same as the Defendants, are also difficult to deem that there was feasibility. Furthermore, even if the listed company was acquired by the above method, it seems that it was difficult to pay KRW 60 million for 30 days (in relation to the business of soliciting investors, Defendant A stated that he did not take charge of the business of soliciting investors, but Defendant B did not make an investment but did not take responsibility for the other party by making a statement that Defendant A did not make an investment).

Furthermore, Defendant A was sentenced to two years of imprisonment due to a violation of the Financial Investment Services and Capital Markets Act, and released from prison on October 7, 201, and the instant crime was still in force, and there was no sufficient time to repay. At the time, Defendant B, who was engaged in credit business, borrowed a total of KRW 189,70 million from the Victim K to November 30, 201, a total of ten times from June 25, 2010 to KRW 10,000,000 from the Victim K, and was unable to repay a considerable amount of money, and even according to Defendant B’s statement, it was difficult to recover the claim from several places of business at the time due to the depression of the industry, and thus, it was difficult to obtain a large amount of money from Defendant B to finance. In addition, Defendant B was aware of the fact that Defendant B was sentenced to KRW 700,000,000 from each of the above corporations with KRW 20,000,000 from 20.

2) Determination on public offering relations

Comprehensively taking account of the following circumstances acknowledged by the evidence duly examined by this court, the Defendants and the defense counsel can sufficiently recognize that the Defendants committed the crime of fraud. Accordingly, this part of the Defendants and the defense counsel’s assertion is not accepted. Defendant A confirmed that at the time of borrowing 1, the victim K used to take over the listed companies with KRW 160 million and returned to the listed companies for 30 million, and that there is sufficient 3 days to the victim K. Further, it would be sufficient to say that: (a) the facts would be sufficient; (b) it would be sufficient to say that it would be sufficient to bring about 3 days to the victim K; and (c) it was requested first so that the Defendant B would receive a loan; and (d) the above 60 million won would be actually used as its own business fund; and (e) the Defendant would be responsible for the final repayment of the above 60 million won.

Defendant B, not merely introduced Defendant A, but at the same time, explained to the effect that “Defendant A would make a representative director of the listed company and take over the listed company in addition to the interest of KRW 10 million after 3 days since the loan was insufficient.” ② On February 21, 2012, Defendant B prepared a notarial deed as a joint debtor by having the above obligation repaid jointly with Defendant A, and ③ agreed to enter into a joint agreement with Defendant A and the above 60 million won to carry out a joint business based on the joint agreement and use KRW 5 million out of the above 60 million for the purpose of activity expenses, etc.

Reasons for sentencing

1. The scope of punishment by law;

A. Defendant A

1. Crimes No. 1: Imprisonment with prison labor for not less than one year and six months but not more than seven years and six months;

2) Crimes No. 2: Fines not exceeding 20 million won;

(b) Defendant B: Imprisonment for not more than 15 years;

2. Non-application of the sentencing criteria;

A. Defendant A: The crime No. 1 in the holding is a concurrent crime under the latter part of Article 37 of the Criminal Act with a violation of the Financial Investment Services and Capital Markets Act on the statement of crime records, and the crime No. 2 in the holding is selected as a fine.

B. Defendant B: Each crime is related to the crime of fraud stated in the judgment and the latter concurrent crimes of Article 37 of the Criminal Code, so the sentencing guidelines do not apply.

3. Determination of sentence;

The following circumstances and the Defendants’ age, character and conduct, environment, motive and background of the crime, means and consequence of the crime, and the circumstances after the crime, etc., shall be determined as ordered by comprehensively taking into account all the factors of sentencing as shown in the trial process of this case.

A. Defendant A

○ Unfavorable Circumstances: The Defendant, even though having no intent or ability to repay, deceiving the victims, thereby deceiving them from the victimJ, and 60 million won from the victim K, respectively. In light of the methods of the above crime and the amount of damage, etc., the nature of the crime is not good. Furthermore, the crime of fraud against the victim K is committed during the period of repeated offense.

A favorable circumstance: The Defendant paid the victims the full amount of damages, and agreed upon with the victims and the victims. The KRW 500 million borrowed from the victimJ was not used individually by the Defendant, but used by the Defendant for the repayment of the Defendant’s debt to H with the management supervisor at the time, and the portion of the borrowed money to the victim K was also done in the course of the actual business implementation. Each of the crimes of this case is a concurrent crime under the latter part of Article 37 of the Criminal Act with each of the previous crimes as stated in the judgment against the Defendant and the latter part of Article 37 of the Criminal Act, and it is necessary to consider equity

B. Circumstances unfavorable to Defendant B: The Defendant, while having no intention or ability to repay, had the victim K by deceiving him as if he were to perform the duty, and the crime is not good in light of the method, frequency, etc. of the above crime. The Defendant has been punished by a majority of the crimes of the same kind.

The favorable circumstances for ○: The Defendant recognized a crime against some of the crimes, and reflects his mistake. The Defendant agreed with the victim K and K does not want to punish the Defendant. Each of the instant crimes is in the concurrent relationship between the crime committed before and after the judgment of the lower court and the crime committed in the latter part of Article 37 of the Criminal Act, and thus, it is necessary to consider equity with the case where the judgment is rendered at the same time.

The presiding judge, judge and presiding judge;

Judges Lee Jong-soo

Judge Kang Han-soo