Defendant 1 and one other

Defendants and Prosecutor

The highest iron bars, ions, chlouds, and chlouds (Trial)

Law Firm (LLC) et al.

Seoul Northern District Court Decision 2018Gohap141 Decided January 25, 2019

All appeals by the Defendants and the Prosecutor are dismissed.

1. Summary of the grounds for appeal 1);

A. misunderstanding of facts and misapprehension of legal principles: Defendants and prosecutors

1) [Defendants] misunderstanding of facts and misapprehension of legal principles concerning the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

In full view of the following facts, the victim of the crime of embezzlement of this case is a corporation with substantive substance and is not deemed to be “Nonindicted 2 Co., Ltd.” and “Nonindicted 3 Co., Ltd.” and “Nonindicted 4 Co., Ltd.” and “Nonindicted 5” that received the price for the goods after performing the actual transaction with Nonindicted Co. 1.

Nevertheless, the lower court determined that Nonindicted Co. 2 and Nonindicted Co. 3 were corporations without substantial substance, and that the Defendants embezzled the funds of Nonindicted Co. 4 and Nonindicted Co. 5, erred by misapprehending the legal doctrine on the victim of embezzlement.

① Defendant 1 had Nonindicted Co. 4 take over Nonindicted Co. 2 in order to improve the profit structure of the entire Nonindicted Co. 1 group by separating Nonindicted Co. 1’s raw material purchase agent business, improving cost management, and finding out highly added materials from a long-term perspective.

In addition, Defendant 1 separated the field of supply of gambling items that should be purchased and supplied from customers because of difficulties in self-production, and had Nonindicted Co. 5 take over Nonindicted Co. 3 in the long term to foster marketing companies through the development of high quality small packaging containers.

As such, when examining the developments leading up to the incorporation of Nonindicted Company 2 and Nonindicted Company 3 into Nonindicted Company 1 Group, the said Company is independent of Nonindicted Company 4 and Nonindicted Company 5.

② In fact, Nonindicted Co. 2 supplied part of the raw materials of spice to Nonindicted Co. 1. Items and trading companies dealt with were distinguished from Nonindicted Co. 4, and carried out food export business, such as would have been engaged in the same business. Likewise, Nonindicted Co. 3 also purchased splate boxes that were not produced by Nonindicted Co. 5 from trading companies and supplied them to Nonindicted Co. 1.

Furthermore, during the period of the instant embezzlement crime, Nonindicted Co. 2 was an employee of Nonindicted Co. 3. Although there was no employee of Nonindicted Co. 3, this is because there was no employee belonging to Nonindicted Co. 3, but there was a need for self-human resources by carrying out simple purchase agency or marketing business. In addition, there was no separate physical facilities among the said companies, but this is merely a narrow difference in the nature of the purchase agency business and the scale of the business that do not require production facilities

Above all, Nonindicted Co. 2 and Nonindicted Co. 3, the parent company, as an executive officer of Nonindicted Co. 4 and Nonindicted Co. 5, have separate legal personality as a different legal entity, and have been independently managed financial and accounting in the course of performing their duties. In light of the process and purpose of taking over Nonindicted Co. 2 and Nonindicted Co. 3’s business sector of Nonindicted Co. 5, it cannot be deemed that the Defendants had an intent to use the instant subsidiaries for

In light of the actual operational situation, Nonindicted Company 2 and Nonindicted Company 3 should be deemed to have a separate entity from the parent company.

2) [Public Prosecutor] Defendant 1’s assertion of mistake as to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation)

Non-Indicted 6’s own input of resources to promote the common interest of Non-Indicted 1 Company Group, and even if the profits of Non-Indicted 1 Company Group were promoted, it was damaged by infringing on the unique interests of the shareholders of Non-Indicted 5 other than the non-Indicted 1 Company. In addition, since the brand owned by Non-Indicted 7 was in a chronic state before it was taken over to Non-Indicted 5 Company, it is difficult to deem that there was a high risk of investment, and that the total loss of Non-Indicted 6 was attributed to Non-Indicted 5 Company. The victim Non-Indicted 5 caused serious adverse effects on the financial soundness and profitability due to lending of large amounts of resources to Non-Indicted 6 Company. In addition, it appears that the defendant, who was reported on the objective financial status of Non-Indicted 6 Company, could have been aware that there was no possibility for the non-Indicted 6 Company to repay the debt, and in the process, the defendant did not have any intention to commit the crime of breach of trust by the victim.

Nevertheless, the court below's decision that it is difficult to conclude that the defendant had the intention of breach of trust is erroneous.

B. Unreasonable sentencing: Defendants and prosecutor

1) Defendants

The sentence sentenced by the court below to the defendants (Defendant 1: 3 years of imprisonment; 3 years of suspended sentence to 2 years of imprisonment; 80 hours of community service order) is too unreasonable.

(ii)a prosecutor;

The above-mentioned sentence sentenced by the court below to the defendants is too unfortunate and unfair.

2. Determination on the grounds for appeal

A. Judgment on misconception of facts and misapprehension of legal principles

1) [Defendants] As to the assertion of misunderstanding of facts and misapprehension of legal principles as to the violation of the Act on the Aggravated Punishment, etc.

In full view of the following facts acknowledged by the court below and the evidence duly adopted and examined by the court below, it is sufficient to view that the non-indicted 2 and the non-indicted 3 were merely a business department belonging to the non-indicted 4 and the non-indicted 5, and that the non-indicted 5 operated the non-indicted 4 and the non-indicted 5 without any specific substance. Therefore, it is reasonable to deem that the victim of the crime of embezzlement of this case was the non-indicted 4 and the non-indicted 5.

The court below's decision to the same purport is just, and there is no error of misunderstanding of facts or misunderstanding of legal principles as alleged by the defendants, and therefore there is no ground for appeal.

A) Defendant 1 included Nonindicted Company 2 and Nonindicted Company 3 in Nonindicted Company 1 group in order to perform part of Nonindicted Company 4 and Nonindicted Company 5’s business as it is.

(1) In the case of Nonindicted Company 2

① On March 29, 2003, Defendant 1 established Nonindicted Company 2 on September 2, 2003 in order to promote the business of self-determination after the resignation of Nonindicted Company 1’s executive position. After that, Defendant 1 returned to the management line of Nonindicted Company 1’s group in around 2005, and Nonindicted Company 2 did not perform any particular business prior to the acquisition of Nonindicted Company 4.

② Around September 2007, Nonindicted Co. 4 acquired the entire shares of Nonindicted Co. 2 in accordance with Defendant 1’s order, and Nonindicted Co. 8, who was in charge of Nonindicted Co. 4’s purchase business at the time, proposed at the prosecutor’s office that Nonindicted Co. 8, who had been in charge of Nonindicted Co. 4’s business, would be able to make profits if Nonindicted Co. 9, who was the head of Nonindicted Co. 4’s factory at the time, would be able to make profits from the establishment of a company “after Nonindicted Co. 9 reported to Defendant 1, who had no actual company and employee, so that no agricultural product (biological) or biosusus 5 would be able to make profits if he supplies agricultural products (biological) or biosussus 5). The following three proposals were reported, and the proposal was adopted to supply all agricultural products and bios that could give much profits (No. 3rd 6).

In addition, Nonindicted 9, who was appointed as the representative director of Nonindicted Company 2 on October 30, 2007, stated in the investigative agency that “Nonindicted 9, who had been appointed as the representative director of Nonindicted Company 2, was to start a new business using Nonindicted Company 2 to Defendant 1 B. Accordingly, it was determined that Nonindicted Company 2 could proceed with a new business that should be sold to a certain extent, and that Nonindicted Company 4 attempted to sell agricultural products supplied by Nonindicted Company 4 and raw materials of barbs” (the same is consistent with Nonindicted 8’s statements).

In full view of these statements, it is sufficient to view that Defendant 1 selected some of the items supplied by Nonindicted Co. 4 to Nonindicted Co. 1 and transferred them to Nonindicted Co. 2, as a means of promoting only the sales of Nonindicted Co. 2 without any specific business concept to divide the supply structure of Nonindicted Co. 4 or to specialize Nonindicted Co. 2.

③ As to this, the defense counsel asserts that there was a need for the division of the supply structure of raw materials concentrated on Nonindicted Company 4 within the group of Nonindicted Company 1 at the time, and accordingly, Defendant 1 was responsible for Nonindicted Company 2’s supply of raw materials, which is variable in the prices among the supplied items of Nonindicted Company 4, to Nonindicted Company 2.

Therefore, the “○○○○○ Development Plan (Evidence 102)” prepared by Nonindicted Company 4 around February 2008, stating that part of the supply of raw materials carried out by Nonindicted Company 4 is in charge of Nonindicted Company 2, and the “○○○○○○ Development Plan (Evidence 102)” prepared around February 2008 includes that Nonindicted Company 2 will play a certain role in supplying agricultural and fishery products.

However, each of the above data only was prepared after the acquisition of Nonindicted Company 4 by Nonindicted Company 2 on or after September 2007, and even according to this, there is no specific statement about whether Nonindicted Company 2 will be supplied to any of the items supplied by Nonindicted Company 4, and Nonindicted Company 9 stated in the prosecutor's office that "If the case of other companies is analyzed, Nonindicted Company 2 thought that it would be difficult to find ideas and enter into the new business so as to prevent them from entering the new business (see Supreme Court Decision 34280)," and it appears that there was no clear perception about Nonindicted Company 2's future business losses after the acquisition of Nonindicted Company 2, and in fact, Nonindicted Company 2 did not implement any new business for ten years thereafter, and it is difficult to accept the assertion by the defense counsel in view of the fact that there is no evidence to deem that the technical skills or business capabilities related to the above living things and the raw materials handling work have been accumulated.

(2) In the case of Nonindicted Co. 3

① On March 29, 2003, Defendant 1 retired from the position of officer of Nonindicted Company 1, and on November 3, 2003, acquired 60% of the shares of Nonindicted Company 3 from Nonindicted Company 10. Thereafter, around 2005, Defendant 1 returned to the management line of Nonindicted Company 1 Group, and Nonindicted Company 3 did not perform any business until it was acquired from Nonindicted Company 5.

② Around October 2007, Nonindicted Co. 5 accepted 60% of the shares of Nonindicted Co. 3, and Nonindicted Co. 3 did not have any career in the small packaging container supply business prior to the incorporation into Nonindicted Co. 1’s group, Nonindicted Co. 5 carried out the business of purchasing the small packaging containers from the existing customers secured by Nonindicted Co. 5 even after incorporation into Nonindicted Co. 1’s group and supplying them to Nonindicted Co. 1, and Nonindicted Co. 11, who had worked for the head of Nonindicted Co. 5’s factory as the representative director, had been instructed by Nonindicted Co. 5’s employees.

In addition, even according to the statement of Nonindicted Co. 11 (Evidence 103) submitted by the defense counsel, “Defendant 1 wanted to become a specialized packing marketing company for Nonindicted Co. 3, and recommended Nonindicted Co. 5 to handle the small packaging containers, etc. purchased and supplied by Nonindicted Co. 5 outside to handle them in Nonindicted Co. 3 for stable sales.” According to this, it is deemed that there is no need to separate the field of small packaging container supply among the business of Nonindicted Co. 5 at the time. Meanwhile, Nonindicted Co. 3 did not have any volume of packaging containers for ten years until they are merged with Nonindicted Co. 5 on October 207, 2017.

In full view of these circumstances, it is reasonable to view that Defendant 1 transferred part of the items supplied by Nonindicted Co. 5 for the purpose of simply increasing the sales of Nonindicted Co. 3 even though there was no need to diversify the business sector of Nonindicted Co. 5.

③ As to this, the defense counsel asserts to the effect that “Nonindicted Co. 5 acquired Nonindicted Co. 3 according to the plan to foster specialized companies in the development and marketing of high quality small packaging containers.”

However, as seen earlier, in light of the fact that Nonindicted Co. 3 did not independently develop packaging containers or conduct marketing business for ten years from the date of acquisition until the merger with Nonindicted Co. 5, as well as that of mid- and long-term business plans necessary for the development of high quality small packaging containers and the specialized marketing are not submitted, the above assertion cannot be accepted.

B) Even if considering the actual operational status, Nonindicted Company 2 and Nonindicted Company 3 cannot be deemed to have performed the same role as the parent company’s business department without any particular entity.

(1) Services performed;

① After the acquisition of Nonindicted Company 4, Nonindicted Co. 2 took charge of the business of the purchase and supply of raw materials for the purchase and supply of raw materials, among the business of the purchase and supply of raw materials, the category of items handled was merely divided, and the previous business was carried out by Nonindicted Co. 4 by succeeding to part of the raw materials supply fields in charge, and the process of business for the supply of goods was also carried out in the same manner as Nonindicted Co. 4. Furthermore, even though Nonindicted Co. 2 took profits from the supply of raw materials to Nonindicted Co. 1, it did not carry out any new business other

Of course, according to the documents related to export (Evidence No. 84) and the statement of Nonindicted 9 (Evidence No. 100) submitted by the defense counsel, Nonindicted Company 2 was found to be a scam of exporting the goods, if the goods were to be exported to the United States. However, if Nonindicted Company 2 was relatively early from 2008 to 2010, then Nonindicted Company 2 was taken over, it was deemed to have taken temporary measures to export scam of the United States in order to export scam if it was scam of scamscams, and Nonindicted Company 2 did not carry out the overseas export business thereafter.

② After Nonindicted Co. 3’s acquisition of Nonindicted Co. 5, Nonindicted Co. 3 succeeded to Nonindicted Co. 5’s business by purchasing the small packaging containers from the customers secured by Nonindicted Co. 5, and delivering them to Nonindicted Co. 1. From the time of acquisition to the time of merger with Nonindicted Co. 5, there was no way to promote or proceed with any independent business for ten years. In addition, Nonindicted Co. 5’s business succeeded to Nonindicted Co. 3 after the merger with Nonindicted Co. 3 on Nov. 1, 2007 and then succeeded to the previous business from Nonindicted Co. 3 ( several 34856).

(2) Whether the person or material independence is independent

① Nonindicted 8, who had been in charge of the purchase of Nonindicted Company 4 by the end of September 2010, stated at the prosecutor’s office that “No employee was employed in the name of Nonindicted Company 2, and all employees of Nonindicted Company 4 were in charge of Nonindicted Company 2’s business.” Nonindicted 12, who was assigned to the purchase business from September 2013 to the public prosecutor’s office, did not distinguish both the goods supplied in the name of Nonindicted Company 4 and Nonindicted Company 2 at the time of the purchase and the goods supplied in the name of Nonindicted Company 4.” In addition, Nonindicted 9 also stated that “The actual business of Nonindicted Company 2 was carried out in the name of Nonindicted Company 2 by all the employees of Nonindicted Company 4 and dealt with the said business.”

Meanwhile, Nonindicted Co. 2 did not employ employees until July 2012, when four years have passed since the acquisition of Nonindicted Co. 4 by Nonindicted Co. 4, and only on August 1, 2012, Nonindicted Co. 13 was registered as an employee, but Nonindicted Co. 13 was merely an employee who was concurrently engaged in Nonindicted Co. 2 and Nonindicted Co. 4’s business (the number of Nonindicted Co. 34764).

In addition, even though Nonindicted Co. 2 stored the goods purchased from the trading company in a warehouse leased by Nonindicted Co. 4 from Nonindicted Co. 14 (only there was a difference between the freezing and the general warehouse, depending on the characteristics of the goods supplied), it did not have paid the price to Nonindicted Co. 4 (No. 45243-5246). Moreover, there was no office separate from Nonindicted Co. 4, as well as a telephone leading (No. 45094).

As such, the personal and material facilities of Nonindicted Co. 2 were entirely dependent on Nonindicted Co. 4, which is a significant circumstance to support the operation of Nonindicted Co. 2 as the business department of Nonindicted Co. 4, and considering that the sales of Nonindicted Co. 2 at the time of the increase in replacement of the sales of Nonindicted Co. 2, it cannot be viewed as a result of the narrow business size and the lack of many equipment due to the characteristics of the business.

② After the acquisition of Nonindicted Co. 5, Nonindicted Co. 3 did not employ an employee, and the performance of its duties was carried out by Nonindicted Co. 5, a director of Nonindicted Co. 5, registered as the representative director of Nonindicted Co. 3, who was the director of Nonindicted Co. 5, directed Nonindicted Co. 5’s employees. Nonindicted Co. 3 did not have any way to pay the said employee the wages (the number of Nonindicted Co. 34865, 45084-5).

In addition, Nonindicted Co. 3 used one of the conference rooms inside Nonindicted Co. 5’s office as an office, and this is only a lick board for a meeting with a consignor and did not have any particular facilities for the handling of business affairs.

As such, Nonindicted Co. 3’s human and physical facilities are entirely dependent on Nonindicted Co. 5. However, in light of the fact that Nonindicted Co. 3 was entering sales in excess of KRW 1 billion each year from 2008 to 2017, it cannot be deemed as a result of the occurrence of damages due to the need for equipment in light of the size of business or the characteristics of business.

③ As Defendant 2 actually had been performing the duties of Nonindicted Company 2 and Nonindicted Company 3, Nonindicted Company 2 and Nonindicted Company 3, the parent company, also asserts that it was equipped with human resources separate from Nonindicted Company 4 and Nonindicted Company 5.

Therefore, according to the health team and evidence evidence Nos. 89 through 96 submitted by the defense counsel, Defendant 2 regularly visited Nonindicted Co. 1’s factories, stock farms, etc., and acknowledged that Nonindicted Co. 1 instructed the method of loss and management of design or raw materials during the process of developing new products, etc., and Nonindicted Co. 15, who works as the head of the Food Research and Security Center of Nonindicted Co. 1, stated in the trial court that “Nonindicted Co. 2 and Nonindicted Co. 3, was considerably involved in Defendant 2’s business.”

However, following the records, Defendant 2 did not approve the internal documents of Nonindicted Co. 2, and Nonindicted Co. 3’s representative director, Nonindicted Co. 11, in the prosecutor’s office, stated that “only when Defendant 1 directly reported matters concerning Nonindicted Co. 3, Defendant 1 obtained approval from Defendant 2,” and Nonindicted Co. 15 also requested the prosecutor’s office to supply products to Nonindicted Co. 4 or Nonindicted Co. 2. The prosecutor stated that “When Defendant 2 received an order to develop products using specific materials from Defendant 2.” This was the fact that Defendant 2 instructed Defendant 2 as the president of Nonindicted Co. 1, and that it is difficult to accept the assertion that there was an independent defense counsel’s overall duty to evaluate Nonindicted Co. 1 and Nonindicted Co. 1’s factories and prototypes in the process of visiting them or giving instructions to some of them. In light of the above, it is difficult to accept that there was an independent defense counsel’s assertion that it is against the overall duty of evaluation of Nonindicted Co. 3 as part of its own raw materials.

(3) Legal independence, identity of finance and accounting, and intention of Defendant 1

① The actual business instruction of Nonindicted Company 2 and Nonindicted Company 3 was issued directly by Defendant 1 who directed Nonindicted Company 1’s group. At the time, both Nonindicted Company 11 and Nonindicted Company 9, who was the representative director of the said company, reported to Defendant 1 and carried out the business. Furthermore, Defendant 1 also managed both Nonindicted Company 2 and Nonindicted Company 3’s funds.

Considering this point, it is difficult to reverse recognition that Nonindicted Co. 2 and Nonindicted Co. 3 are merely Nonindicted Co. 4 and Nonindicted Co. 5’s business department merely as Nonindicted Co. 4 and Nonindicted Co. 5, solely on the ground that Nonindicted Co. 2 and Nonindicted Co. 3 were a separate corporation consisting of executive officers different from the parent company, or undergone the financial management procedure independent

② As seen earlier, Defendant 1 appears to have taken over the business sector of Nonindicted Company 4 and Nonindicted Company 5 in fact with an aim to increase Nonindicted Company 2 and Nonindicted Company 3’s sales even though there was no special need for the group of Nonindicted Company 1 to divide and manage the business sector of Nonindicted Company 4 and Nonindicted Company 5.

(4) Other circumstances

① The Defendants, upon receiving the assistance of the counsel at the time of the second interrogation of the suspect, led to the confession that “Nonindicted Co. 2 and Nonindicted Co. 3 are corporations without any substance, and Defendant 2 was aware of the fact that the Defendants received the benefits even though they did not work for Nonindicted Co. 2 and Nonindicted Co. 3” (No. 46160-6162, 6181-6182).

The above confessions by the Defendants do not merely relate to the legal evaluation of whether their acts constitute embezzlement, but rather, it is reliable that Defendant 2 stated specific facts as to the role of Nonindicted Co. 3 and Nonindicted Co. 2 performed.

② Meanwhile, the defense counsel asserts that the purchase of goods by Nonindicted Company 2 and Nonindicted Company 3 from the trading company does not constitute a false conspiracy under the Civil Act as a real transaction, but does not constitute a false conspiracy under the Civil Act, and that there is no purpose of tax avoidance in the above transaction. In light of this, the victim of the embezzlement argues that the victim of the embezzlement is Nonindicted

However, embezzlement is established when a person who keeps another's property has embezzled the property. In light of the human and material composition, specific duties, role, and type of operation of the Nonindicted Company 2 and Nonindicted Company 3 as seen earlier, Defendant 1, in collusion with Defendant 2, should be deemed to have constituted the crime of embezzlement of this case by realizing the intent of unlawful acquisition by taking advantage of the fact that the price of the goods to be actually reverted to the victim Nonindicted Company 4 and Nonindicted Company 5, who are merely the business department of the said victims, was received in the name of the said victims, and withdrawn it.

Therefore, the issue of whether the victims' price of the goods was fictitiously traded as a means to move to Nonindicted Co. 2 and Nonindicted Co. 3, and whether there was a purpose of tax avoidance is merely the issue of how the Defendants transferred the victim's property, which is the procedure accompanying the process of ultimately realizing the intent of unlawful acquisition, and the issue is whether there is no relationship with the victim of embezzlement. Thus, this part of the defense counsel's assertion is without reason to examine.

2) [Public Prosecutor] As to Defendant 1’s assertion of misconception of facts about the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

A) The judgment of the court below

First, the lower court determined that the Defendant’s act of having Nonindicted Co. 5, an affiliated company of Nonindicted Co. 1, an affiliated company of Nonindicted Co. 1, and Nonindicted Co. 6, a complete subsidiary of Nonindicted Co. 1, to lend KRW 1,950,00,00 to Nonindicted Co. 6, as indicated in Nonindicted Co. 5’s attached Table 7-1 through 5 of the lower judgment, with the intent to commit a crime of breach of trust in breach of one’s duty, based on the following facts: (a) on the basis of business judgment and the criteria for determining whether the act of assistance was performed within the discretionary scope of reasonable business judgment; and (b) comprehensively taking account of the facts and circumstances revealed from the evidence duly adopted and investigated; and (c) the lower court determined that the Defendant’s act of having Nonindicted Co. 5, an affiliated company of Nonindicted Co. 1, an affiliated company of the same Group, to lend the above money to Nonindicted Co. 1, a complete subsidiary, was for common interests of Nonindicted Co. 1, within the reasonable scope of business judgment.

In addition, the court below explained the legal principle that "if the principal has guaranteed the debt of a third party, the principal is not sufficient to pay the debt of the third party, and the guarantor is likely to pay the debt of the third party, and the new fund has been used to pay the debt of the guaranteed debt, the principal shall not be deemed as causing a risk of causing a new loss, separate from the former debt," and determined that the defendant's act of having the non-indicted 5 company lend KRW 1 billion to the non-indicted 6 on July 4, 2016 as shown in the annexed Table 7 of the court below's judgment, as shown in the evidence duly adopted and investigated, cannot be deemed as causing a new loss separate from the damage caused by the joint and several debt of the non-indicted 5, which was incurred by the former."

B) Determination of the immediate deliberation

In addition to the facts and circumstances indicated in the judgment below properly explained by the court below, the following facts acknowledged by the evidence duly adopted and investigated by the court below and the circumstances revealed from them, i.e., the main sales of Nonindicted Co. 5, were generated in the supply to Nonindicted Co. 1. Thus, if the value of Nonindicted Co. 6 increases and the sales of Nonindicted Co. 1 are increased, this would be attributed to the profits of Nonindicted Co. 5, and thus, it would eventually result in a benefit to the entire shareholders of Nonindicted Co. 5, as alleged by the prosecutor.

Therefore, the prosecutor's argument of mistake is without merit.

B. Determination on the assertion of unfair sentencing

The Defendants, in fact, are merely the victim Nonindicted Co. 4 and Nonindicted Co. 5’s business department, and in fact, pretended that Nonindicted Co. 2 and Nonindicted Co. 3 engaged in independent transactions. During that process, the Defendants made preparation of relevant documents, such as a written resolution of the victims’ expenditure and written materials. From 2008 to 2017, the Defendants committed the crime amounting to 10 years, and the amount embezzled in the process amounting to 4.99,937 million won. In light of the means and results of the crime, it cannot be said that the nature of the crime is very heavy. Defendant 1’s overall management of the Nonindicted Co. 1’s business group as the chairperson of the Nonindicted Co. 1, a domestic representative company, was the spouse of Nonindicted Co. 1, and Defendant 2 took part in the management of the Nonindicted Co. 1’s president’s position, taking into account the fact that not only Nonindicted Co. 1’s shareholders but also Nonindicted Co. 1’s employees, employees, creditors, and interested parties, etc. were responsible for social and transparent policy decision-making.

However, the Defendants are recognized as substitute facts and are against the law. There is no apparent circumstance that the Defendants established and accepted a juristic person for the purpose of embezzlement of the victims’ funds from the beginning. The Defendants paid the full amount of the embezzled money to the victims. Defendant 1 had no record of punishment other than the fine imposed by the violation of the Securities and Exchange Act in around 1997, and Defendant 2 had no record of criminal history. Defendant 2 does not have any aspect according to the process that Defendant 1 led the instant crime. The employees of the Defendants wanted the Defendants’ wife. This point is favorable to the Defendants.

In cases where there is no change in the conditions of sentencing compared to the first instance court, and the sentencing of the first instance court does not deviate from the reasonable scope of discretion, it is reasonable to respect the judgment of the first instance court as an appellate court (see Supreme Court en banc Decision 2015Do3260, Jul. 23, 2015).

In light of the above legal principles, the circumstances alleged by the Defendants and the Prosecutor as an element of sentencing were already revealed and sufficiently considered during the hearing of the lower court, and no particular change in circumstances was found in the matters subject to the conditions of sentencing after the sentence of the lower judgment. In addition, the lower court’s sentencing should be respected on the following grounds: (a) considering the circumstances in the grounds of sentencing; (b) the Defendants’ age, occupation, character and environment; (c) character and environment; (d) the means and consequence of the crime; (b) the motive and consequence of the crime; (c) the degree of responsibility with the accomplices; (d) social relation; and (e) the sentencing guidelines of the Supreme Court’s Sentencing Committee.

Therefore, each of the Defendants and the prosecutor’s arguments on unreasonable sentencing is without merit.

3. Conclusion

Since each appeal by the Defendants and the prosecutor is without merit, they are dismissed in accordance with Article 364(4) of the Criminal Procedure Act. It is so decided as per Disposition.

Judges Lee Jin-tae(Presiding Judge) Doo-hun

1) Each written statement submitted by a prosecutor and the defense counsel of the Defendants subject to the submission period for the grounds of appeal is deemed to be within the scope of supplement in the grounds of appeal.

Note 2) If the name of the Company is indicated below, the entry of “stock company” is omitted.

Note 3) The trade name before the change is “○○○○○○ Company” and the name of the company was changed to “△△△△△ Company” on August 28, 2017. hereinafter “Nonindicted 4 Company” regardless of whether it was before or after the change.

Note 4) In the relevant item only referred to as “Defendants”; hereinafter the same shall apply.

Note 5) Items that may be supplied to Nonindicted Company 1 without any further processing after being supplied by the supplier, as they are, mean, for example, dried, silent, scroke, etc.

Note 6) hereinafter referred to as “man 3 4206”.

Note 7) It is the weak of Frozen Drying.

8) Meanwhile, the defense counsel asserts that “Nonindicted Co. 5 was in a situation where it is inevitable to produce them because it has no production capacity of the new packaging container itself, but there was no choice but to produce them. However, Nonindicted Co. 3 needs to engage in a business that can earn fixed profits around that time, and thus, Nonindicted Co. 5 had Nonindicted Co. 3 take over Nonindicted Co. 3 as its subsidiary.” The assertion itself is merely that Nonindicted Co. 5 was in charge of the supply of the small packaging container operated by Nonindicted Co. 5 for the improvement of sales of Nonindicted Co. 3.