All appeals by the Defendants are dismissed.

Summary of Grounds for Appeal

Defendant

According to Article 2 subparagraph 5 of the former Door-to-Door Sales Act (amended by Act No. 11324, Feb. 17, 2012; hereinafter “Door-to-Door Sales Act”), multi-level marketing salespersons should be solicited to both retail profit and support allowances in order to meet the requirements for multi-level marketing. In this case, Defendant L received business expenses and support allowances from the Defendant of the upper company while recruiting members and selling products under a contract with H Co., Ltd. (hereinafter “the upper party company”). However, the lower court found the Defendant guilty of the facts charged of the instant case, inasmuch as there was no solicitation or receipt of retail profit, which is the requirements for multi-level marketing, by misapprehending the fact that the lower court erred by misapprehending the fact that the lower court did not have affected the conclusion

Defendant

Punishment A, B, C, and D (Defendant A: a fine of 15 million won, Defendant B: a fine of 10 million won, Defendant C: a fine of 30 million won, Defendant D: a fine of 5 million won, and Defendant D: a fine of 5 million won) imposed by the lower court on the ground of unfair sentencing of A, B, and D is unreasonable.

Defendant

Judgment on the misunderstanding of L's Grounds for Appeal

A. According to the evidence duly admitted and examined by the lower court, the following facts can be acknowledged.

1. On March 17, 2011, from around September 1, 2011 to around September 1, 2011, the Defendant Co., Ltd. recruited and sold goods. The Defendant Co., Ltd. purchased KRW 297,000 in cash, KRW 600,00 in premium, and KRW 100,000 in premium, depending on the product composition. However, upon joining two members as subordinate members after joining, KRW 100,000 in premium shall be paid to each of the subordinate members, and when the two members join two members per day, KRW 100,000 in premium shall be paid to each of the subordinate members in each stage without restriction at the stage of entry, and KRW 770,00 in cash, KRW 90,00 in premium, KRW 90,00 in premium, and KRW 90,00 in case of the composition of other goods.