All appeals by the Defendants are dismissed.

1. Summary of grounds for appeal;

A. Defendant A (1) misunderstanding of the facts and legal principles, and (1) even though the Defendant was fully responsible for the payment of the subsidy of this case, the lower court found the Defendant guilty of the facts charged of this case. In so doing, the lower court erred by misapprehending the legal doctrine and misconception

(2) A crime of fraud may not be established in relation to the granting of subsidies, taking into account legal interests, whether property is damaged, illegality of deception, etc.

(3) In determining the scope of the amount of fraud, including the design cost paid to certified architect Q, and the cost of construction actually disbursed by the defendant, and the “amount which would have been received by being recognized as a subsidized project if the defendant has made a lawful application” shall be excluded from the amount of

2) The punishment of the lower judgment that was unfair in sentencing (three years of suspended sentence in one year and six months) is too unreasonable.

B. The sentence of Defendant B’s judgment (two years of suspended sentence in six months of imprisonment) is too unreasonable.

2. Determination

A. Determination on Defendant A’s assertion of misunderstanding of the facts and misapprehension of the legal principles 1) Article 40 of the former Subsidy Management Act (amended by Act No. 10898, Jul. 25, 2011) provides that “A person who has received subsidies or indirect subsidies by false application or other unlawful means, or who has received subsidies or indirect subsidies by knowing the fact, shall be punished by imprisonment for not more than five years, or by a fine not exceeding 30 million won.

In this context, “a false application or other unlawful means” refers to the affirmative and passive act that may affect the decision-making on the grant of subsidies by deceptive means or other acts deemed unfair in light of social norms even though a person is unable to receive subsidies through normal procedures (see, e.g., Supreme Court Decision 2015Do14365, Feb. 18, 2016) and “the grant of subsidies by unlawful means.”