2012Gohap1214 Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlements);

The violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Explication)

Violation of the Act on Regulation and Punishment of Criminal Proceeds Concealment

1. A;

2. B

Lee Jin-bok (prosecutions) and Nom Jeong-ok (Public Trial)

C Law Firm, Attorneys D and E (Defendant A)

Law Firm F, Attorneys G, Law Firm H, Attorneys I (Defendant B)

For purposes of

October 31, 2014

Defendant A shall be punished by imprisonment with prison labor for six years and by imprisonment for four years.

Criminal facts

【Criminal Records】

Defendant A was sentenced to imprisonment with prison labor for the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and for the violation of the Act on the Regulation on the Aggravated Punishment, etc. of Specific Economic Crimes in Busan High Court on January 28, 2010 and the suspended sentence was finalized on January 28, 2010.

On June 24, 2011, Defendant B was sentenced to one year and six months of imprisonment and two years of suspension of execution on July 2, 2011 for violating the Act on Special Cases concerning the Punishment, etc. of Sexual Crimes (special indecent act by force) in the Busan District Court’s branch branch branch branch.

【Criminal facts】

From January 15, 2008, Defendant A took overall charge of the above business as the representative director of J (hereinafter referred to as J) who is a futures trading company, and Defendant B was in charge of fund management as the head of the computer office of the above company.

On July 2, 2008, Defendant A and the J Chairman established L (hereinafter referred to as “L”) on July 2, 2008, and registered Defendant A as the representative director, received investment funds from investors, and conducted foreign exchange futures trading business. On July 4, 2008, Defendant A and the J Chairman changed the trade name of J to M Co., Ltd. (hereinafter referred to as “M”).

From May 2008, the Busan East Police Station: (a) from January 15, 2008 to J, Defendant A, in collusion with K, etc., could not pay the dividend that was promised to investors because it did not incur any profit from the real transaction in foreign exchange line; (b) however, from January 15, 2008 to October 22, 2008, the Busan East Police Station agreed to make an investment of KRW 1 million to make an investment of KRW 6 to 8% of the principal of each share; and (c) paid KRW 3 million to 6 to 24% of the principal of each share for each share if the investment exceeds KRW 10 million,00,000,000,000 for more than KRW 6 to 8% of the principal of each share; and (d) obtained permission from investors for acquisition of more than KRW 30,095,50,000,000 for the future and did not receive or report the investment amount exceeding KRW 6 to 6 to 6 to 26 to 6.5 million.

Defendant A continued an investigation on July 16, 2008, including the search and seizure of the company office, etc., and when it is anticipated that Defendant A would be bound by the aforementioned suspicion, Defendant A voluntarily withdrawn the corporate fund of L, which was collected from Defendant B, and received a return and received a refund to Defendant B for personal use.

1. Defendants A and B’s criminal conduct;

A. Around July 31, 2008, Defendant A embezzlement of KRW 1,796,766,685 in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) (1), in total face value of the negotiable deposit certificate, and KRW 1,996, 766, 685 in the victim L office located in the Busan Busan Jin-gu N. 301 on July 31, 2008, Defendant A withdrawn the corporate funds kept in the corporate account in the name of M and withdrawn the negotiable certificate of KRW 1996, 766, 685 in the face value of the negotiable certificate of deposit, and withdrawn funds from the borrowed account in the name of A and B, which are the borrowed account keeping corporate funds of L on August 11, 200, and KRW 4,400 million in the face value

9. 30. L’s account in the name of A, a borrowed account that keeps L’s corporate funds, withdrawn funds and issued and kept negotiable certificates of deposit KRW 100 million and KRW 400 million, respectively.

Defendant A kept 1,796,766,685 won in total on behalf of the company at 9 negotiable certificates of deposit and placed 9 negotiable certificates of deposit in custody for the company at around October 9, 2008.

After that, on February 23, 2009, Defendant A instructed Defendant B, who had met himself at the Busan detention center, to exchange negotiable certificates in cash through NHFF branch P by NHF branch and Vice Director P, and Defendant B accordingly exchanged 1,800,000 won check including interest, etc. on the negotiable certificates through P around February 23, 2009.

The Defendants did not use the check for the victim M, L, or the return of investment money for the victim corporation, and used the check for personal purposes such as personal living expenses, deposit money, business investment expenses, etc. from that time.

Accordingly, the Defendants conspired and embezzled the victim M’s corporate funds of KRW 996, 766, 685, and KRW 800 million of the victim L’s corporate funds.

(2) On August 11, 2008, Defendant A embezzled KRW 500 million in total face value of negotiable deposit certificates issued and kept KRW 500 million in total 50 million in face value of negotiable certificates of deposit and KRW 60 million in face value of negotiable certificates of deposit and KRW 100 million in face value. Defendant A kept negotiable certificates of deposit for the foregoing company while he/she was in custody for the foregoing company, around October 8, 2008, Defendant B used the above negotiable certificates of deposit as living expenses, etc., and Defendant B issued KRW 50 million in total face value of negotiable certificates of deposit to Defendant B and Defendant B issued KRW 300 million in face value to friendly R around February 2, 2009, and issued KRW 300 million in face value to negotiable certificates of deposit to Defendant B for his/her own use, including negotiable certificates of deposit.

Accordingly, the Defendants conspired and embezzled the victim L’s corporate funds of KRW 500 million. (3) 4.4 billion embezzlement.

Defendant A, around October 2, 2008, deposited 7 billion won in the above L Office’s account under the name of the victim J at the victim J’s corporate account, and withdrawn 140 billion won check.

Defendant A was under the custody of KRW 7 billion on behalf of the said Company for the said Company, and on October 9, 2008.

Before being detained, the check of the above number No. 102, 1402, 1402 was concealed in Busan So-gu T apartment, Busan, and on January 2009, the police officer informed the defendant B, who opened his/her meeting, of the fact that he/she was hidden in the above apartment inside, and kept the above check in custody.

After that, when Defendant A was released on bail on March 2, 2009, Defendant A instructed Defendant B to exchange 1 million won with the original check through the above P on March 2, 2009 when Defendant B was released on bail.

Defendant B, on March 14, 2009, exchanged the check equivalent to the above seven billion won via the above P with 1 billion won check, 100 million won check, 10 billion won check, 50 million won check, and 5,000 won on the part of Defendant A.

The defendant A received the above check from the defendant B from March 23, 2009 to April 2009.

10. By the end, the Defendants used 2.6 billion won as the agreed amount of damage to investors of the victim L. Moreover, the Defendants used the remaining 4.4 billion won for the payment of checks and cash exchange cost, attorney-at-law appointment cost, personal business investment cost, living cost, etc. without using it for the victim corporation.

Accordingly, the Defendants conspired and embezzled the victim L’s corporate funds of KRW 4.4 billion. (4) 900 million embezzlement.

On October 7, 2008, Defendant A withdrawn KRW 900 million from the account in Q Q’s name, which is a borrowed account that keeps the corporate funds of the victim L in the above L office.

Defendant A, while keeping KRW 900 million of the check on behalf of the above company, was placed under the custody of the above company, and around October 9, 2008, the above check was placed on the part of Defendant B. After being detained, Defendant A instructed Defendant B to exchange the above check in cash.

On October 30, 2008, Defendant B asked V through U to exchange the last holder of the check with cash, and then voluntarily consumed the check for personal purposes, such as granting V a price of KRW 10 million in return for the check, and given the remainder of KRW 890 million to Defendant A. Defendant A’s use of the said money for personal expenses, etc. Defendant A received the said money from Defendant B, without using it for the victim’s personal expenses, etc.

As a result, the Defendants conspired and embezzled KRW 900 million for the victim L corporation. (5) around October 7, 2008 to October 8, 2008, Defendant A embezzled KRW 1,645,229,459: (a) KRW 2; (b) KRW 400 million check at the victim L corporation account; (c) KRW 1,57,341; (d) KRW 1,645,29,459; and (e) KRW 1,645,29; and (e) KRW 2,459; and (e) KRW 1,645,29,459; and (e) KRW 1,649; and (e) KRW 1,645,229; and (e) KRW 2,459; and (e) KRW 1,000; and (e) KRW 2,000; and (e) KRW 1,000; and (e) KRW 208.

Defendant B, on October 2008, requested for exchange in cash to Maman-Man in the middle of the year 2008. Defendant B voluntarily consumed the check for personal purposes, such as 1,645, 229, and 459 won in total for five face value of the check, and R voluntarily delivered the check to a third party to exchange in cash.

As a result, the Defendants conspired and embezzled the amount of KRW 1,645,229,459 of the victim L corporation funds. (6) In doing so, the Defendants conspired in collusion for embezzlement of KRW 996,766,685 of the victim M corporation funds and KRW 8,245,229,459 of the victim L corporation funds.

B. The Defendants conspired to commit the crime proceeds of KRW 1,796,766,685 in violation of the Act on Regulation and Punishment of Criminal Proceeds Concealment (1), and embezzled the victim M’s corporate fund of KRW 1996,766,685, and KRW 800 million in corporate funds of the victim L, as described in subparagraph 1-A (1).

On February 2, 2009, Defendant A instructed Defendant B to exchange 1,796,766, and 685 won in cash at the Busan detention center located in the Busan District School of the Busan District in order not to track funds for KRW 1,79,796, 685.

On February 23, 2009, Defendant B requested the Vice Director of NHFF Bank Branch and Vice Director of NHFF Bank in the vicinity of 0 points of NHFF Bank in Busan, Busan, to exchange money in cash to P in order not to trace the source of funds.

The fact that P, despite the fact that the last holder of Chapter 9 of the above certificate of deposit was Defendant A and Defendant B, entered X as the last holder of the certificate of deposit, and then exchanged 1,80,000 won check with 1,000 won plus interest in KRW 1,796, 766, 685.

As a result, the Defendants conspired and embezzled the amount of KRW 996,766,685, and KRW 800,000,000 embezzled from L corporation funds, as if the certificates of deposit and checks were not related to criminal proceeds. (2) The Defendants conspired in collusion for 4.4 billion criminal proceeds and embezzled the amount of KRW 4.4 billion for victim J corporation funds as described in subparagraph 1-A (3).

On March 2009, Defendant A instructed Defendant B to exchange KRW 7 billion with KRW 1 million check, etc. in order not to trace funds for KRW 7 billion that was withdrawn from the funds of J corporation.

Defendant B requested, around March 16, 2009, to exchange KRW 7 billion in total at the face value of KRW 50 million in the vicinity of the branch of the said NHFF Bank, in the face value of KRW 140,000,000 and KRW 1,000,000 in the face value check, etc.

The fact that P, despite the fact that the last holder of the said check was Defendant A and Defendant B, was endorsed as the last holder of X, and then exchanged as the last holder of the said check one billion won check, 10 billion won check, 50 million won check, and 100 million won check to Defendant B.

As a result, the Defendants conspired to make up for the 4.4 billion won embezzled from the J Corporation’s funds, as long as the said checks are not related to the proceeds of crime, they pretended about the acquisition and disposition of proceeds of crime, etc.

(3) The Defendants conspired to commit the crime proceeds amounting to KRW 900 million and embezzled KRW 900 million as stated in Section 1-A(4).

On October 2008, Defendant A instructed Defendant B to exchange in cash not to trace the amount of KRW 900 million at the face value of KRW 100 million at the face value of KRW 900 million, which was withdrawn from the funds of J corporation.

Defendant B requested V to exchange the above check in cash through U around October 30, 2008 in accordance with the above direction, and V exchanged the cash to Defendant B through U after the last holder endorsemented as he himself.

As a result, the Defendants conspired to make up for the amount of KRW 900 million embezzled from the J Corporation funds, as long as the said check is not related to the proceeds of the crime, they pretended to acquire the proceeds of the crime.

(c) Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Increase, etc.) (1) 200 million won.

The Defendants, as described in paragraph 1-b. (1) in collusion, asked the above P to exchange 1,796,766,685 won in cash or 1 million won check with a face value not to trace funds, and P to exchange 1,00,000 won check with 1,00,000 won check with interest added, after the last holder was written in X, not the Defendants.

On February 23, 2009, Defendant B issued KRW 200 million to P in return for exchanging negotiable certificates of deposit with KRW 1,800,000 won in the face value of KRW 1,800,000 from P in the vicinity of the branch office of NHF Bank in Busan, Busan, and then exchanging negotiable certificates of deposit with 1,00,000 won in the face value check. (2) KRW 300,000 won grant

The Defendants, as described in paragraph 1-b. (2) in collusion, asked the above P to exchange KRW 50 million in cash or one million in original checks in order to prevent the source of the funds from being traced, and as stated in paragraph 1-b. (2), they exchanged the last holder of the said checks with KRW 1 billion in original checks, KRW 10 billion in original checks, KRW 50 million in original checks, and KRW 50 million in original checks to Defendant B.

On March 16, 2009, Defendant B issued KRW 300,000 to P in return for exchanging KRW 7 billion in the face value check, etc. with KRW 1 billion, KRW 100,000,000, KRW 500,000, KRW 7 billion, in the vicinity of the branch of the NHFF Bank.

(3) Granting 40 million won or more

On April 2009, Defendant A instructed Defendant B to exchange approximately KRW 2.9 billion in cash out of the 1 million check exchanged as described in the preceding paragraph with Defendant B.

Defendant B, in accordance with the direction above, exchanged approximately KRW 2.9 billion in cash over several occasions at the vicinity of the branch of the said NHF Bank to P, on April 2009, at the point of the said NHF Bank, and upon request, exchanged the said checks in cash.

On April 2009, Defendant B delivered KRW 30 million in cash to P in the name of cash exchange in the vicinity of 0 points of the NHF Nonghyup Bank, and KRW 10 million in cash from the Nam-gu Y apartment parking lot in Busan in April of the same year to P in the same name.

In this way, the Defendants conspired to give the P, an employee of financial companies, etc. money in total of KRW 540,000,000,000 to four times in connection with their duties.

2. Defendant A’s violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) issued and stored negotiable certificates of deposit KRW 600 million in the victim L corporation account at the above L office around September 26, 2008.

While Defendant A was in custody for the company at issue, he was placed in custody at around October 8, 2008 when he was detained, Defendant A used the amount of KRW 400 million as living expenses, etc. for personal purposes, such as using the said funds as funds for investment in the business. Defendant A, around March 16, 2009, sent KRW 12 million to the head of MN loan team group group 12 billion as employee monthly wage, and voluntarily used the remainder of KRW 80 million as living expenses, etc. and delivered KRW 100 million as a honorarium for his release on his own by attorney-at-law around March 17, 2009.

In this way, the defendant embezzled the victim L's corporate funds of KRW 5880,000.

Summary of Evidence

1. The Defendants’ partial statements in the first trial record;

1. Statements made by witnesses P and K in the second trial records;

1. Each statement made by a witness AB, V, and R in the third protocol of trial;

1. The statements of witnesses AC, Z and S in the fourth trial records;

1. Statement made by a witness AD in the fifth trial records;

1. Statements made by witnesses AE in the sixth trial records;

1. Statement made by a witness AF in the seventh trial records;

1. Statement made by AG of a witness in the ten-time trial records;

1. AH, AI, R, AJ, AK, AL, AM,N, and AO's written statement by each prosecutor;

1. Each investigation report (Evidence Nos. 11, 12, 21, 27, 56, 57, 63, 104, 138, 152, 155, 158, 167, 267, 268, 269, 270, 272, 277);

1. Details of issuance of cashier's checks by No. 3, No. 1: Book No. 6, Book No. 8, Book No. 1, No. 800, No. 1,800, No. 1400, No. 5,000, No. 1400, No. 10000, No. 1000, No. 10000, No. 1000, No. 600, No. 1000, No. 1000, No. 3000, No. 600, No. 300, No. 1006, No. 106, No. 1,000, No. 1,000

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

○ Defendant A: Article 3(1)1 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (amended by Act No. 11304, Feb. 10, 2012; hereinafter the same), Articles 356, 355(1), and 30 of the Criminal Act [1-A] Articles 42 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (amended by Act No. 10259, Apr. 15, 2010; hereinafter the same shall apply]; Article 3(1)3 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (amended by Act No. 11304, Feb. 10; hereinafter the same shall apply]; Article 3(1)1 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes; Article 356 and Article 30(1) of the Criminal Act on the Aggravated Punishment, etc. of Specific Economic Crimes (amended by Act No. 1013 of the former Act on the Aggravated Punishment Act)

○ Defendant B: Article 3(1)1 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 356, 355(1), and 30 of the Criminal Act (Article 1-A of the same Act); Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes; Article 356, 355(1), and 30 of the Criminal Act (Article 1-A of the same Act); Article 3(1)1 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 356, 355(1), and 30 of the same Act on the Aggravated Punishment, etc. of Specific Economic Crimes; Article 42 of the same Act on the Aggravated Punishment, etc. of Specific Economic Crimes; Article 3(1)1 of the former Act on the Regulation and Punishment of Criminal Proceeds Concealment; Article 30(1) of the Criminal Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 30(1) of the former Act on the Aggravated Punishment)

1. Handling concurrent crimes;

○ Defendant A: the latter part of Articles 37 and 39(1) of the Criminal Act / [each of the crimes in the judgment and the judgment, in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud), and in violation of the Act

○ Defendant B: The latter part of Articles 37 and 39(1) of the Criminal Act / [the crimes of each of the subparagraphs of paragraph (1) of the same Article and the violation of the Act on Special Cases concerning the Punishment, etc. of Sexual Crimes (special indecent

1. Aggravation for concurrent crimes;

○ Defendant A: the former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act [Article 1-A of the Judgment on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) with respect to Victim L in Article 37 of the Criminal Act]

○ Defendant B: the former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act [Article 1-A of the Judgment on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) with respect to Victim L in Article 1-A of the Judgment on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)]

1. Discretionary mitigation;

○ Defendant B: Articles 53 and 55(1)3 of the Criminal Act (The following factors are considered as favorable circumstances among the reasons for sentencing)

[Defendant A alleged to the effect that he was unaware of all the crimes since he committed all the crimes under the direction of Defendant B, but it is difficult to view that he was unaware of each crime in light of the following various circumstances, and rather, it is reasonable to view that he committed each crime in conspiracy with Defendant B or independently with Defendant B.

① As the representative director of M and L, Defendant A has been in charge of the business of attracting investment amount, acquiring a company, and investing in real estate. Defendant AC, a bank of the said legal entity, has been in charge of almost all transactions by Defendant A. Defendant A, a subsidiary role, Defendant A, a direct transaction of receiving and withdrawing corporate funds, or a transaction after obtaining confirmation from Defendant A., and Defendant A, a financial accounting employee of the said legal entity, stated that Defendant A was in charge of the management of the company and Defendant B was in charge of the business according to Defendant A’s instructions.

② Defendant A opened and managed a multiple borrowed-name account in which corporate funds are kept in custody. From July 31, 2008 to September 30, 2008, the investigation of fraud and fund-raising act was underway, Defendant A withdrawn a large amount of corporate funds from the corporate account and borrowed-name account and kept them after issuing a certificate of deposit.

③ During the period when Defendant A and K were detained on suspicion of fraud, etc., Defendant B met mainly Defendant A. During the interview, Defendant A entered the personal and corporate funds in relation to the disposal of funds in the bank account, Defendant B informed Defendant B of the place where the cashier’s checks were hidden, and Defendant B managed the corporation’s funds through Defendant B, such as checking cash amount in the bank account, etc., by having the employees of the Nonghyup Bank act on behalf of P, who are employees of the Nonghyup Bank. In addition, Defendant A entered in detail the matters regarding the company’s operation, including the payment of dividends and Bobs, by sending a page to K, and obtained a transfer from Defendant B as corporate funds, and entered in the account book as a refund of investment.

④ Defendant A stated that, after Defendant A’s release on bail, Defendant A sent the money launded to Defendant A, and Defendant AB also stated that, after Defendant A’s release, Defendant A’s driver was the front left of the passenger car, he was sent what was from Defendant B. ( ⑤ Defendant A issued a deposit certificate and cashier’s check several times from Defendant B and exchanged them in small amount of cashier’s checks or cash, but Defendant A was aware that it was directed by Defendant B, and at the time of exchanging KRW 7 billion (50 million cashier’s checks) around March 2009, Defendant A intended to adjust the amount of commission in direct conversations with P, and after June 1, 2009, Defendant A exchanged KRW 3 billion directly launded KRW 50 million with KRW 15 million.

(6) On April 26, 2013, in the Busan District Court, P was sentenced to imprisonment with prison labor for 6 years and a fine of 600 million won for the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, and the above judgment became final and conclusive. The criminal facts of P are that P was exchanged for small amount of money and in cash with a certificate of deposit, check, etc. received from the defendant B under the direction of the defendant A, and received money

7) The Defendants and the victims of fraud were aware that the agreement on the victims of fraud was led by Defendant A or the Defendant B and S were dealt with, and the AR and Z were found to include money launderingd during the check directly received from Defendant A.

④ The KRW 900 million withdrawn from the account in the name of Q, managed by Defendant A (Chapter 9 of KRW 100,000, KRW 900,000, KRW 500,000, KRW 500,000, KRW 100,000, KRW 500,000, was exchanged in cash through Defendant B via Defendant B. Upon the summons to the prosecution, the Defendants made a

9) S used 1.3 billion won of a check of money laundering to use it for investment in Youngcheon Business, and prepared a contract by designating himself as the agent of the Defendant A. P borrowed part of the embezzled money from the Defendant A, or prepared funds in the form of joint investment with the Defendant A, and made an investment in real estate located in the Youngdo-gu in Busan, Ulsan-gun, Ulsan-gun, etc.

① In view of the use of embezzlement money, most of the embezzlement money was used by the Defendants and their families for personal purposes, such as money laundering fee for P, apartment lease deposit, business investment funds including real estate, attorney fees for Defendant A, R’s life cost, and other expenses for living of the Defendants and S.

① The purpose of keeping corporate funds as a certificate of deposit which is easy to conceal without being deposited in the corporate account is deemed to have been the purpose of money laundering and concealment in the current investigation. In addition, if the funds were to be used as a deposit for the victims of fraud, it seems that there is no reason to exchange high-amount of fees with cash or small cashier’s checks even when paying them. It would be reasonable to have the corporate funds deposited in the corporate account to determine the assets of the corporation and to recover the victims in proportion to the amount of damages in accordance with legal procedures. Even if some embezzlements were used as a criminal agreement amount against the victims of fraud, it would be reasonable to deem that arbitrary use of funds for an individual criminal agreement without undergoing such normal procedure does not affect the part of the crime of embezzlement.

② Defendant A’s assertion that even if he was entrusted with a large amount of certificate of deposit before being detained, Defendant A did not confirm the place of use of the funds after release on bail or take follow-up measures is difficult to accept.

13 Although Defendant A asserts to the effect that the embezzlement of criminal facts includes personal funds, Defendant A does not provide minimum explanation about the source of personal funds, and the mixed management of personal funds and corporate funds cannot be viewed as a normal method of fund management by a corporation.

[Defendant B’s assertion that he was only fluent in accordance with Defendant A’s instruction, and that he was not well aware of the content of the crime, but it is reasonable to deem that Defendant B committed each crime under paragraph (1) of the judgment in collusion with Defendant A in light of the following various circumstances.

① On October 2008, M and L were under investigation by fraud and act of fund-raising, and Defendant A was almost close to a person with bad credit standing.

② In addition, Defendant B had been aware of the fact that Defendant A had already withdrawn a large amount of corporate funds since Defendant B recorded the details of the corporation’s Internet banking every day by computer and reported them to Defendant A.

③ Furthermore, Defendant A stated that there is no problem because the name of the bearer, which was used by the former president, is a laundry method of money laundering with Defendant B and S, before being detained. After being detained, Defendant A instructed Defendant B, through a secret method, or instructed Defendant B, to exchange money concealed in an enclosed place, such as under the apartment harassment, under the bottom of the bed, under the bed, and under the bed, etc., during the time of detention, by threatening Defendant B to record important matters related to the money. Thus, Defendant B could have sufficiently known that the funds exchanged through P are not normal funds.

(4) In addition, considering the importance of Defendant B’s role, importance, and active nature of the act, etc., the degree of Defendant B’s participation cannot be assessed to the extent that the degree of Defendant B’s participation is simply true.

Reasons for sentencing

1. The scope of punishment;

○ Defendant A: Imprisonment for 5 years to 22 years;

○ Defendant B: Imprisonment with prison labor of two years and six months to one year and one month;

2. Scope of recommendations)

○ Basic Crimes: Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)

【Determination of Type】

- Embezzlement and breach of trust, type 4 (at least five billion won, less than 30 billion won) 2

【Special Convicted Persons】

-Aggravated factor: Where mass victims (including workers, shareholders, creditors, etc.) have caused serious damage to the victim, or where criminal proceeds have been intentionally concealed, and where the method of criminal proceeds has been extremely poor;

- Reduction element: Substantial one company or family company

【General Adopteds】

- Aggravations: in the case of embezzlement

[Scope of Recommendation Form]

- 5 years to 12 years of imprisonment [the maximum of the sentence range recommended in the sentencing guidelines (8 years) shall be aggravated to 1/2 because there are more than two special persons in the increased area and special persons, and there are more than two special persons, respectively]

○ Concurrent Crimes: Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Additional Crimes)

【Determination of Type】

- Securities, financial crimes, financial crimes, evidence of officers and employees of financial institutions, Category IV (not less than KRW 100 million);

【Special Convicted Persons】

- Aggravations: Cases where affirmative evidence, solicitations are involved in illegal or unjust business operations;

【General Adopteds】

- Aggravations: in a case where business relevance is high;

[Scope of Recommendation Form]

- From 3 to 7 years and 6 months of imprisonment [the maximum of sentence range recommended in sentencing guidelines (five years) shall be increased by 1/2 because there are more than one aggravated area, two special persons, and there are more than two special persons];

○ Scope of the recommended punishment revised according to the guidelines for handling multiple crimes: 5 years to 15 years [the (5 years) of imprisonment, or the upper limit of basic crimes (12 years) + 1/2 (3 years and September) of the upper limit of concurrent crimes: Provided, That since there is a violation of the Act on Regulation and Punishment of Criminal Proceeds Concealment for which no sentencing guidelines are set, only the lower limit of the above recommended punishment shall be considered];

3. Each of the instant crimes committed by Defendant A and K, in the course of the investigation and trial conducted by Defendants A and K through fraud and fund-raising, the Defendants conspired or embezzled the corporate funds of the victim M and the victim L by himself, and through P, the employees of the Nonghyup Bank, exchanged the certificate of deposit and the certificate of high-amount tickets, which are funds of the said corporation, with cash and small-amount checks, and paid fees to P during money laundering.

The crime of fraud was a large fraud that caused harm to our society by deceiving 1,65 billion won or more, excluding dividends, and making up 10,000 won or more. Despite these circumstances, Defendant A’s prior decision on suspended execution had reached an agreement with many victims of fraud during the trial process, and the purpose was to additionally pay damages during the future. However, considering the various circumstances revealed in the oral proceedings of this case, the victims of fraud were to prepare an agreement to receive additional reimbursement in the future, but the Defendants embezzled large amount of damages up to KRW 10 billion, which was inevitable in the process of embezzlement and laundrying funds, and made funds more than KRW 10,000,00,000, and the number of victims was more than 10,000,000 won. However, the Defendants still did not take into account the following factors: (a) the Defendants did not have any liability for unlawful real estate investment and attorney-at-law’s expenses that were embezzled; and (b) the Defendants still did not appear to have committed the crime.

However, the Defendants appears to have discharged damage to some victims who are creditors of the victim company. Defendant B actively endeavored to repay additional damage during this trial process, and the case where each of the crimes recorded in the records of the crime in the judgment that became final and conclusive is judged concurrently with the case where the judgment was rendered concurrently, and the principle of equity should be taken into account. In addition, the degree of the Defendants’ participation, age, character and behavior, environment, health conditions, motive of the crime, circumstances after the crime, etc. are considered and the punishment as set forth in the instant pleadings

Judges in English and English;

Gambi -

Judges Shin Dong-dong

1) Sentencing Criteria as of July 1, 2012

2) The same concurrent principal determines the type on the basis of the sum of the amount of profit from embezzlement and breach of trust.