Defendant 1 and five others

Defendants

Park Sang-woo

Law Firm Barun, Attorneys Jeong Jin-jin et al.

Suwon District Court Decision 2004Gohap524, 2005Gohap172 decided Oct. 25, 2005

Of the judgment of the court below, the part against Defendant 1 and 2 and the conviction against Defendant 6 are all reversed.

Defendant 1 shall be punished by imprisonment for two years, by imprisonment for two years, and by imprisonment for two and six months.

However, the execution of each of the above penalties shall be suspended for three years from the date of the final judgment of this case, and for two years for defendants 2 and 6.

All of the appeals filed by Defendant 3, 4, and 5 and by the Prosecutor are dismissed.

I. Summary of the grounds for appeal

1. Defendant 1 (Fact-finding and misunderstanding of legal principles)

A. As to the loan exceeding the limit for the same person

(1) In examining whether the crime of breach of trust is established in a case where a loan is extended to the same person, it shall be determined by considering whether the collection of the loan is possible or whether the security therefor is adequate, and whether the defendant has a criminal intent to commit a crime of breach of trust. The defendant (trade name omitted) obtained an adequate security, taking into account the possibility of the collection of the loan for the benefit of the Saemaul Bank, and carried out each loan according to reasonable business judgment, and as a result, expressed the financial situation of the Treasury by raising considerable business performance due to each of the above loans. In light of this, the defendant did not have the criminal intent to commit a crime of breach of trust.

(2) The crime of breach of trust is established when a certain act causes damage or actual damage to the principal’s property, and it is unreasonable to recognize the crime of breach of trust by deeming that a loan exceeding the limit has caused damage to the community credit cooperative itself, even though it is difficult to deem that there was a damage to the community credit cooperative itself even though it is difficult to deem that a loan exceeding the limit has occurred.

(3) Articles 66(2)6 and 26(3) of the former Community Credit Cooperatives Act (amended by Act No. 7658 of Aug. 4, 2005; hereinafter “former Act”) that the lower court applied to excess loans to the same person, and Article 23 of the Enforcement Decree of the Community Credit Cooperatives Act, are unconstitutional.

B. As to occupational breach of trust due to the depreciation of loans, etc.

(Trade Name omitted) In order for Nonindicted 2, who worked as the head of the Saemaul Bank, embezzled public funds, made loans of KRW 80 million in the name of Nonindicted 2 and 3 around March 1999, and the Defendant, etc. offered real estate as security, even though there was no responsibility for the above case. The above loans were formally caused to deal with the embezzlement incident of Nonindicted 2, and it was anticipated from the beginning to redeem if sufficient allowances for bad debts were accumulated in the future, so it cannot be said that there was an intention in breach of trust of the Defendant. Moreover, since there was no additional damage to the treasury, the crime of breach of trust is not established.

2. Defendant 2 (Fact-finding, misunderstanding of legal principles, and unreasonable sentencing)

A. As to the loan exceeding the limit for the same person

(1) Article 66 of the former Act provides that a person subject to punishment shall be an officer or employee of a credit cooperative or federation. According to Article 18(8) of the same Act, Article 14(2) of the Enforcement Decree of the same Act and Article 45 of the Articles of Incorporation of the Saemaul Depository, an executive officer, such as a senior executive officer, a managing director, a managing director, a director, and a director, of the Saemaul Depository, shall have passed a screening test conducted by the head of the federation. However, since the defendant was appointed as an executive officer of the above credit cooperative but fails to meet the requirements for qualification under the above Acts and subordinate statutes, it is difficult to deem that he/she falls

(2) Since the Defendant did not have any decision or voting right during the course of lending execution, it is difficult to view that there is a fiduciary relationship to handle business in relation to the credit cooperative, and thus, it cannot be the subject of the crime of breach of trust.

(3) It cannot be said that there was no problem in the collection of loans by securing sufficient collateral in relation to the loan, and that property damage was caused to the credit cooperative. Rather, it cannot be said that there was an intention in breach of trust by the Defendant on the ground that there was a considerable operating profit

B. As to occupational breach of trust due to the depreciation of loans, etc.

(1) (Trade Omitted) Damage of the Saemaul Fund is already incurred when Nonindicted 2 embezzled public funds, and it cannot be deemed that a new damage has occurred to the Fund by depreciating and processing the loan.

(2) Loans for Nonindicted 2’s disposal of embezzlement was anticipated to be disposed of if sufficient bad debt allowances are accumulated in the future, and it cannot be said that there was an intention in breach of trust against the Defendant since the Defendant had already been determined before being employed.

C. Unreasonable sentencing

Considering the fact that the management of the credit cooperative is normalized, and that the credit cooperative actually did not incur any loss, in order to assist the management of the credit cooperative that was faced with the retirement crisis due to the embezzlement of Nonindicted Party 2, etc., the punishment of the judgment of the court below (one year and six months of imprisonment, and two years of suspended execution) is too heavy.

3. Defendants 3, 4, and 5 (De facto misunderstanding).

The decision to redeem a loan is not to cause damage to the treasury due to the resolution of the board of directors and the general meeting in accordance with due process, so there was no intention of breach of trust.

4. Defendant 6

A. (Trade Omitted) The Defendant did not take charge of the loan execution business of the Saemaul Bank, and only approved the loan documents in the form of a formal relationship with the sole head of the Treasury, but did not actually participate in the loan process, and it is unreasonable to recognize the establishment of the crime of breach of trust solely on the ground that the loan exceeds the limit although the security was sufficiently secured during the loan process.

B. Article 66(2)6 of the former Act is unreasonable to apply it as it is, even though it is an invalid provision against the principle of no punishment without the law.

5. Prosecutor (as to Defendant 6’s breach of trust in business due to the depreciation of loans, etc.)

In full view of the fact that Defendant 6 (Trade Omitted) was involved in the act of occupational breach of trust as co-offenders in the act of occupational breach of trust, comprehensively taking account of the following: (a) the relationship between Defendant 1, the president of the Saemaul Depository, and Defendant 1, who is the president of the Saemaul Depository, has carried out the important duties of a credit cooperative; (b) the period of three years after the employee was employed by the head of the department in the following month; and (c) the registration of cancellation of a collateral security was

Ⅱ. Determination

1. Ex officio determination

A. Prior to the judgment on the grounds for appeal of mistake of facts and misapprehension of legal principles by Defendant 1, 2, and 6, the prosecutor applied for amendments to the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust) due to excess loans to Defendant 1, 2, and 6 and the facts charged following the charge of the violation of the Community Credit Cooperatives Act, and the applicable provisions of the Act were changed to “Article 66(2)6 and Article 26(3) of the former Act” from among the applicable provisions of the Act, and the same court was changed to “Article 66(2)8 and Article 26-2 of the Community Credit Cooperatives Act,” and the judgment was changed to the subject of the judgment by this court. Thus, the part against Defendant 1 and 2 and the guilty part against Defendant 6 cannot be maintained any more.

B. Judgment on mistake of facts and misapprehension of legal principles

Although there was an amendment to the indictment as above against the above Defendants, since each of the above Defendants' arguments of misunderstanding of facts and misapprehension of legal principles are still subject to the judgment of the court, this paper examines the above Defendants (However, since the corresponding provision of the former Act that argues that the Defendants' unconstitutionality is not applied due to changes in indictment, it shall not be judged separately as to

(1) Determination as to Defendant 1’s assertion

(A) On the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) due to excess loans to the same person

As properly explained by the court below, the crime of breach of trust includes not only a case of causing a real loss but also a case of causing a risk of property damage, and once the risk of damage has occurred, it does not affect the establishment of the crime of breach of trust even if collateral has been acquired or the damage has been recovered (see, e.g., Supreme Court Decision 2002Do5679, Feb. 11, 2003). Meanwhile, community credit cooperatives, unlike general financial institutions, were established to promote the raising and use of funds based on independent cooperative organizations, and the purport of setting the limit of loans to one member of the treasury in the same lending limit and the guidelines for approval of the National Federation of Community Credit Cooperatives (see, e.g., Supreme Court Decision 200Do5679, Feb. 11, 2003). If it is possible to loan funds to a large number of members, it shall be limited to a large amount of loans to ensure that many members can go back to the majority of the members, and it shall not be deemed that it has reduced the amount of loans of community credit cooperatives more than 20.

Furthermore, in order to establish the crime of occupational breach of trust, there should be subjective requirements such as awareness of violation of duties and the recognition that the person himself or a third party acquires the benefit and thereby causes damage to the principal, i.e., intent of breach of trust. Such recognition is sufficient with dolusent perception and does not require the purpose of causing damage to the principal. Thus, even if there was no purpose of causing damage to the Defendant, according to the evidence duly examined and adopted by the court below, it is recognized that the Defendant was well aware of the fact that each of the loans of this case was excessive, and that there was a decrease in the loans to be executed properly, and therefore, the Defendant did not have an intention of breach of trust.

(B) As to the occupational breach of trust due to loan settlement, etc.

According to the evidence duly adopted by the court below, if non-indicted 2, who has worked as the head of the Saemaul Bank 4. The defendant 1 and 3, become joint and several surety around March 30, 199, with a total of KRW 800 million in each of the above embezzlement amount, and the defendant 2 was provided as security at the time of the above embezzlement amount, and the defendant 3 was unable to collect the remaining amount of the loan money as security by the defendant 1 and the remaining amount of the loan money of KRW 40,000,000, KRW 20,000,000, KRW 47,000,000. The defendant 1 and the defendant 2 were not able to collect the remaining amount of the loan money under the name of the above defendant 2. The defendant 1 and the remaining amount of the loan money of KRW 40,000,000,000,000,000,000,000 won.

On the other hand, as alleged by the Defendant, the above loan obligation of Nonindicted 2, etc., such as Nonindicted 2, etc., was formally incurred solely to handle the embezzlement incident of Nonindicted 2, and thus, it is difficult to believe that the testimony of Nonindicted 2, who is corresponding thereto, is the party who has inflicted damage on the community credit cooperatives, in view of the relation with the Defendants who suffered damage to himself/herself, and there is no other evidence to recognize it. Furthermore, according to the testimony of Nonindicted 3’s witness of the lower court, according to the witness of the lower court, the above loan was actually implemented by compensating for the embezzlement of Nonindicted 2, etc., and later, it can be recognized that, when the allowance for bad debts was accumulated, the security offered by Defendant 1, etc. was terminated and it was not intended to redeem the loan.

Therefore, Defendant 1, etc., even though the claim for the loan incurred in the name of Nonindicted 2, etc. does not meet the requirements for bad debt depreciation or interest reduction and exemption, it shall be deemed that Defendant 1, etc. made the debtor and the offerer obtain financial benefits equivalent to the amount of the loan and damaged the credit cooperative. Therefore, there is no difficulty in recognizing the crime of occupational breach of trust, and on the other hand, this part of the damage to property in the crime of occupational breach of trust is deemed to have occurred immediately by giving up the recoverable loan claim. Therefore, the Defendant’s assertion that there was no intention of breach of trust or that the crime of breach of trust is not established on the grounds that the

(2) Judgment on the mistake of facts and misapprehension of legal principles by Defendant 2

(A) On the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) due to excess loans to the same person

According to the evidence duly examined and adopted by the court below, the fact that the executive director is responsible for working as a credit cooperative's credit and receiving business as a person in the highest position among the general employees (the above investigation records No. 203, No. 2307 of the investigation records). Defendant 2 directly examined the real estate provided as a security for loan application at the site with the directors and auditors of the credit cooperative in order to examine the security and referred to the opinion of other evaluation committee members (the records No. 2202 of the same record, No. 2381 of the same report). Defendant is aware of the detailed contents of the whole excess loan of the same person in this case (the interrogation record No. 1 and No. 2 of the prosecution). Defendant 1 made a decision at the court of the court below as to the loan of this case, but Defendant 2 did not have an important authority to decide on the loan of this case as a real-level manager, and Defendant 2 did not have an independent authority to decide on the loan of this case No. 754 of the same person.

Meanwhile, according to the relevant provisions, such as the Community Credit Cooperatives Act, there is a limitation that a person who has failed to pass the screening examination conducted by the president of the National Federation as an executive officer such as full-time affairs, regular affairs, departments, and chiefs of community credit cooperatives should pass the screening examination. However, the above screening examination seems to be conducted in order to ensure the legality and efficiency of the operation of the National Federation by objectively evaluating the necessary knowledge such as the performance of duties of the executive officers of community credit cooperatives and raising their qualities. However, in the event that a person who has failed to pass the screening examination is appointed as an executive officer, it does not have any provision regarding its effect or sanction in the Community Credit Cooperatives Act. In light of the purport of the above provision, even if a person who has failed to pass the screening examination was appointed as an executive officer, such appointment or the legal status of the executive officer shall not be deemed to be null and void as a matter of course, even if he/she did not pass the screening examination. Therefore, even if he/she did not pass the screening examination, the defendant'

(B) As to the occupational breach of trust due to the depreciation of loans

As seen in the judgment on Defendant 1’s assertion, although the claim for the loan incurred under the name of Nonindicted Party 2, etc. does not meet the requirements for bad debt depreciation or exemption from interest, this part shall be deemed to have caused the debtor and the secured party to obtain financial profit equivalent to the amount of the loan and suffered financial loss to the safe, and thus, the defendant’s assertion is without merit.

(3) As to Defendant 6’s assertion of mistake of facts

In full view of the evidence duly examined and adopted, the court below acknowledged the following facts: (a) The Saemaul Fund was a small-scale safe located in Gohap-si (hereinafter omitted); (b) all employees were not clearly determined by the division of duties from June 16, 199 to June 30, 202; (c) the Defendant has been in charge of receiving and sending money directly from customers while serving as a chief officer; (d) the Defendant was employed as a full-time employee on July 1, 2002 and continued to serve as the chief officer, and was directly approved on the loan-related documents; and (e) the Defendant was not in a close relationship with Defendant 1 to the extent that he was subject to a fine due to the violation of the Election of Public Officials and Prevention of Unlawful Election Act; and (e) the Defendant was not in charge of obtaining and distributing the loans of this case from June 16, 199 to June 30, 202; and (e) the Defendant appears to have been in a relatively long-term relationship with each other’s authority and responsibility.

On the contrary, the party and Nonindicted 4 of the court below stated to the effect that the defendant, the chief of the department, was not involved in the loan business. However, in light of the above circumstances, the above statement is difficult to believe as it is, and considering the above circumstances, it is difficult to find the above statement as it is. Accordingly, the fact-finding and judgment of the court below are justifiable, and it cannot be viewed as unlawful because it is erroneous. Thus, the defendant's assertion is rejected

2. Determination as to Defendant 3, 4, and 5’s assertion

As seen in the judgment on Defendant 1’s assertion, even if the Defendants were not willing to incur damage to the safe, and the board of directors and the general meeting passed a resolution, the Defendants’ assertion that the claims for loans arising under the name of Nonindicted 2, etc., such as Nonindicted 2, etc., did not meet the requirements for bad debt depreciation or exemption from interest, but the board of directors attended the meeting to resolve to redeem the principal of the loans without permission and to reduce interest shall be deemed to have caused damage to the obligor and the secured parties by having them obtain property profits equivalent to the amount of the loans and to the safe. Since the Defendants were deemed to have been well aware of the above contents, the Defendants’ assertion that there was no intention to commit breach of trust

3. Judgment on the prosecutor's assertion

As to this part of the facts charged, the court below held that the registration of termination of the right to collateral security was conducted on June 21, 2002 with respect to the defendant 1 and the non-indicted 1's real estate which was already decided to be mortgaged as of June 21, 2002, and that the minutes of the board of directors were prepared at the time of the resolution of the board of directors on June 13, 2003, but it cannot be recognized that the defendant was merely a temporary employee at the time of the resolution of termination of the right to collateral security, and that there was no authority or responsibility to compensate for bad debt allowances or to reduce overdue interests, such as the facts charged in the judgment, and that there was no evidence to acknowledge that the above act of breach of trust was committed in collusion with the defendant 1.

As seen earlier, Defendant has been engaged in the important work of a credit cooperative with Defendant 1, the chief director, and three years or more since Defendant 1 was employed as an employee at the time of resolution to cancel the right to collateral security established on real estate, including Defendant 1, etc., the fact that Defendant was issued as the chief of the department in the following month and carried out the work of the credit cooperative, and that he directly carried out the registration of cancellation of collateral security, the board of directors was present and directly prepared minutes. However, insofar as there is no evidence to acknowledge that Defendant expressed his intent at the time of resolution to cancel the right to collateral security or resolution to redeem bad debts of loans, it cannot be deemed that Defendant caused damage to the credit cooperative by participating in the bad debt acquisition resolution in collusion with the chief of the board of directors

The judgment of the court below is just and without merit.

III. Conclusion

Therefore, the part against Defendant 1 and 2 and the conviction part against Defendant 6 are reversed ex officio pursuant to Article 364(2) of the Criminal Procedure Act, and the judgment of the court below is reversed, and the appeal against Defendant 3, 4, and 5 and the prosecutor is dismissed in accordance with Article 364(4) of the Criminal Procedure Act.

The Criminal facts No. 1. and 2. of the judgment of the court below are changed as follows, and the summary of evidence is the same as that of the corresponding column of the judgment of the court below.

1. Defendant 1 and 2 conspired:

A loan to the same person of the above credit cooperative pursuant to Article 26-2 of the Community Credit Cooperatives Act shall not exceed the larger amount between 20/100 of the total amount of investment and reserve funds of the above credit cooperative or 1/100 of its total assets, except where the president of the National Federation of Community Credit Cooperatives approves the loan limit (200 million won until October 31, 2003, 30 million won from November 1, 200, 300 won) to be comprehensively approved by the same person of loan limit and approval guidelines of the National Federation of Community Credit Cooperatives established pursuant to the above provision, unless the above credit cooperative obtains a prior approval of the president of the National Federation of Community Credit Cooperatives, despite the existence of a job-related duty to obtain an approval of the head of the National Federation of Community Credit Cooperatives, on February 28, 2001, by lending a loan of more than 20 million won to non-indicted 5 without obtaining a prior approval of the president of the National Federation of Community Credit Cooperatives, and at the same time, in excess amount of 1000 million won and 9.

2. Defendant 6 in collusion with Defendant 1 and Defendant 2:

In a case where the above 1. Paragraph (1) above is intended to make a loan to the same person in excess of the amount prescribed by the Community Credit Cooperatives Act as stated in the above 1. The office of the above credit cooperative violates the above duties and without the prior approval of the president of the National Federation of Community Credit Cooperatives on August 8, 2002, despite the loan balance of 1,010,000,000 won for the same loan amount of 1,50,000 won to non-indicted 5 without the prior approval of the above office of the National Federation of Community Credit Cooperatives, the above bank has obtained property benefits equivalent to the above amount by granting additional loan of 1,50,000 won to non-indicted 5,00 won at its own discretion, and at the same time, loans exceeding the loan limit of 67 times in total to non-indicted 25,00,000 won and at the same time, as shown in attached Table 2, such amount of loan exceeds the loan limit of 1,000 won to the same person.

1. Article applicable to criminal facts;

○ Defendant 1, 2

Each Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3(1) and (2) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356, Article 355(2), and Article 30 of the Criminal Act (including each actual debtor, respectively, and each of the occupational breach of trust listed on the Aggravated Punishment, etc. of Specific Economic Crimes, 1, 3, 10, 11 of the Criminal Code, and 3 of the judgment of the court below). Articles 356, 35(2), 355(2), and 30 of the Criminal Act (in addition to each actual debtor, each occupational breach of trust described on the No. 2, 4, 5, 6 through 9, 12, and 25 of the Aggravated Punishment, etc. of Specific Economic Crimes, Article 66(2) Subparagraph 8, and Article 26-2(a) of the Community Credit Cooperatives Act.

○ Defendant 6

Article 3(1) and (2) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 3(1) and 356, 355(2), and 30 of the Criminal Act (in addition to actual debtors, each occupational breach of trust listed in No. 2 of the Criminal List No. 1, 3, 10, and 11 in the judgment of the court), Articles 356, 355(2), and 30 of the Criminal Act (in addition to actual debtors, each occupational breach of trust listed in No. 2, 4, 5, 6 through 9, 12, or 24 in the same crime list); Articles 6(2)8, and 26-2 of the Community Credit Cooperatives Act (the point of each excessive loan) of the same crime list;

1. Commercial competition;

Articles 40 and 50 of each Criminal Code [each of the above violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) and each of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) and each of the occupational breach of trust in the judgment of the Community Credit Cooperatives, and punishment provided for each of the

1. Selection of punishment;

For each crime of occupational breach of trust, the choice of each imprisonment

1. Aggravation of concurrent crimes;

Articles 37 (former part), 38 (1) 2, and 50 of the Criminal Act [in relation to defendants 1 and 2, the punishment of each of the above crimes shall be imposed on the punishment prescribed on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) in Table 1 of the List of Crimes, which is the most severe crime committed, and with respect to defendants 6, the punishment of each of the above crimes shall be imposed on the punishment prescribed on the violation of the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

1. Discretionary mitigation;

Articles 53 and 55 (1) 3 of the Criminal Code (Defendant 2 is the first offender; Defendant 6 is fined once, Defendant 1 was not subject to a fine, and Defendant 1 was not subject to a serious penalty other than three times of fine; due to loans exceeding the limit for each identical person of this case, the above safe was unlikely to incur substantial damage to the above depository and a substantial portion of the loan has already been recovered; and due to the contribution to returning the above safe, which was in the crisis immediately preceding the bankruptcy, to the current safe safe, taking into account each of the circumstances such as the circumstances leading to each of the instant crimes, motive, and circumstances after the crime).

1. Suspension of execution;

Article 62 (1) of each Criminal Code (General Consideration in Discretionary Mitigation)

[Attachment Form 5]

Judges Min Il-young (Presiding Judge)