[1] The case affirming the judgment of the court below that where the defendant who is a multi-level marketing salesperson had a multi-level marketing salesperson purchase goods to a person who intends to become a multi-level marketing salesperson, it constitutes "the act of having a multi-level marketing salesperson bear the burden" under Article 45 (1) 3 of the former

[2] The scope of "employee of a corporation" under Article 63 of the former Door-to-Door Sales Act, which is a joint penal provision

[3] In applying the joint penal provisions of the former Door-to-Door Sales Act, whether a multi-level marketing salesperson is an employee of a multi-level marketing business entity (affirmative)

[1] The case affirming the judgment of the court below that where the defendant, who is a multi-level marketing salesperson, had a multi-level marketing salesperson purchase goods to the person who intends to become a multi-level marketing salesperson, even if he received the money as a purchase price for goods in the form of a formal charge, it constitutes "act of having a multi-level marketing salesperson bear a burden" under Article 45 (1) 3 of the former Door-to-Door Sales, etc. Act (wholly amended by Act No. 6688 of March 30, 202)

[2] The term "employee of a corporation" under Article 63 of the former Door-to-Door Sales, etc. Act (amended by Act No. 6688 of March 30, 2002) includes not only a person who has entered into a regular employment contract with a corporation but also a person who is controlled and supervised by a corporation directly or indirectly while carrying out the business of the corporation.

[3] In light of the type of multi-stage sales business and the relationship between multi-stage sales business and multi-stage sales business operators, multi-stage sales business operators are practically engaged in recruitment and support activities of multi-stage sales business operators under the management of multi-stage sales business operators. Thus, multi-stage sales business operators are subject to the benefit accrued from the sale of goods or the provision of services. Thus, multi-stage sales business operators are subject to the control and supervision of multi-stage sales business operators and are engaged directly or indirectly in the multi-stage sales business, and at least in applying the joint penal provisions of the former Door-to-Door Sales, etc. Act (wholly amended by Act No. 6688 of March 30, 2002

[1] Article 2 subparag. 8 (see current Article 2 subparag. 5) and Article 2 subparag. 9 (see current Article 2 subparag. 5) and Article 45(1)3 (see current Article 23(1)3) of the former Door-to-Door Sales, etc. Act, Article 23 (see current Article 29) of the former Door-to-Door Sales, etc. Act / [2] Article 63 (see current Article 57) of the former Door-to-Door Sales, etc. Act (wholly amended by Act No. 6688, Mar. 30, 2002) / [3] Article 68 of the former Door-to-Door Sales, etc. Act (wholly amended by Act No. 6688, Mar. 30, 2002)

[1] Supreme Court Decision 2003Do3210 Decided June 25, 2004, Supreme Court Decision 2002Do5539 Decided November 12, 2004 / [2] Supreme Court Decision 2002Do2298 Decided March 12, 2004

Defendant 1 and one other

Defendants

Attorney Lee Im-soo et al.

Ulsan District Court Decision 2003No290 delivered on July 18, 2003

All appeals are dismissed.

We examine the grounds of appeal.

1. Parts regarding acts to erase burdens;

Article 45(1)3 of the former Door-to-Door Sales, etc. Act (amended by Act No. 6688 of Mar. 30, 2002; hereinafter the same) prohibits a person who intends to become a multi-level marketing salesperson or a multi-level marketing salesperson from bearing a burden regardless of the name, form, such as subscription fee, market goods, sales auxiliary goods, individual allotted sales amount, education expenses, etc., and Article 23 of the former Enforcement Decree of the Door-to-Door Sales, etc. Act (amended by Presidential Decree No. 17685 of Jul. 24, 2002) provides that "The act of having a multi-level marketing salesperson bear a burden regardless of the name and form of multi-level marketing salesperson, or a person who is registered as a multi-level marketing salesperson, means collecting expenses, other money, or having another person purchase or sell goods or services at a certain amount, regardless of the name and form thereof."

Therefore, allowing multi-stage salesmen to not become multi-stage salesmen unless they purchase goods or services above a certain amount would be an act of having multi-stage salesmen bear the burden on those who want to be multi-stage salesmen.

In addition, Article 2 subparag. 8 of the Act provides that multi-level marketing means a multi-level marketing with a specific person's subscription to a salesman in a successive and phased manner (referring to a case where the participation of a multi-level marketing salesperson is at least three stages), and Article 2 subparag. 9 of the Act provides that "(a) a seller or a service provider purchases goods or services supplied by such seller or service provider, and sells or provides them to consumers; (b) a seller or a service provider shall be admitted to a specific person as an assistant salesman, and Article 2 subparag. 9 of the Act provides that "a certain benefit means retail profit that a multi-level marketing salesperson obtains by selling goods to consumers and that a multi-level marketing salesperson pays to such multi-level marketing salesperson," and that a multi-level marketing salesperson's subscription to a multi-level marketing shall not be permitted only if he or she is admitted to a multi-level marketing salesperson's subscription to a specific person, and that a multi-level marketing salesperson's subscription to a multi-level marketing salesperson's subscription to a certain amount of bonus shall not be established.

Examining the reasoning of the judgment below in light of the records in light of the above legal principles, the court below acknowledged the fact that Defendant 1 had a multi-level marketing salesperson purchase 1,100,000 won of misleading products, etc. to the prospective multi-level marketing salesperson. Even if the above amount was received from the prospective multi-level marketing salesperson formally from those who want to become multi-level marketing salesperson, the court below's decision that found Defendant 1 guilty of facts on the ground that the substance of the above amount was a burden on the above person, is just and acceptable, and there is no error of law by misunderstanding facts due to violation of the rules of evidence or misunderstanding of legal principles as to "the act of taking burden" under Article 45 (1) 3 of

2. Part concerning the application of the joint penal provisions

Article 63 of the Act provides that "if a representative of a corporation, or an agent, employee or other servant of a corporation or an individual commits an offence under Articles 58 through 62 in connection with the business of the corporation or the individual, not only shall such offender be punished, but also the corporation or the individual shall be punished by a fine under each relevant Article."

The purport of such joint penal provisions is to ensure the effectiveness of the penal provisions through the punishment of a corporation or other business negligence. As such, “employee of a corporation” referred to in this context includes not only a person who has entered into a regular employment contract with a corporation but also a person who is under the control and supervision of the corporation in the course of directly or indirectly performing the business of the corporation (see Supreme Court Decision 2002Do298, Mar. 12, 2004, etc.).

Multi-level marketing means a sale of goods or services by a multi-level marketing business operator through a multi-level marketing organization. In this case, multi-level marketing business operators obtain the status of multi-level marketing salespersons after entering into a sales contract with a multi-level marketing business operator and completing procedures for registration, and sell, recruit and supporting goods or services supplied by a multi-level marketing business operator to consumers, and in return for payment of retail profits or bonuses (see Articles 2(8) through 14, 30(1) of the Act). A multi-level marketing business operator employed by a multi-level marketing business operator is prohibited from registering a multi-level marketing organization managed and operated by the multi-level marketing business operator (Article 30(2) of the Act), and a multi-level marketing business operator is prohibited from using any position that may be mistaken for employees of a multi-level marketing business operator (Article 45(1)13 of the Act). However, multi-level marketing business operators are prohibited from entering into a multi-level marketing business operator's multi-level marketing organization with a certificate of registration of multi-level marketing operators (Article 3).

In addition, when entering into a contract for the sale of goods or the provision of service, multi-level marketing operators and multi-level marketing operators shall deliver not only multi-level marketing salespersons but also documents stating the terms of contract including personal information of multi-level marketing operators (Article 33(1) of the Act). The counterpart to the transaction can withdraw the contract directly to multi-level marketing operators (Article 35(2) of the Act).

In light of the type of multi-stage sales business and the relationship between multi-stage sales business and multi-stage sales business operators, multi-stage sales business operators are practically engaged in recruitment and support activities of multi-stage sales business operators under the management of multi-stage sales business operators. Thus, multi-stage sales business operators are subject to profits from sales of goods or provision of services. Thus, multi-stage sales business operators are directly or indirectly engaged in multi-stage sales business and are in the position of employees of multi-stage sales business operators in the application of joint penal provisions.

Upon examining the reasoning of the judgment below in light of the records on the premise of the above legal principles, the court below is just in finding that the defendant company was in a position to direct and supervise multi-level marketing salespersons directly or indirectly, and found the defendant company guilty of the crime on the ground that the defendant company is an employee of the defendant company, and there is no violation of law of misunderstanding of facts or misunderstanding of legal principles as to joint penal provisions under the Act on Door-to-Door Sales, Etc. due to violation of the rules of evidence as otherwise alleged in the ground

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Son Ji-yol (Presiding Justice)