2018Gohap490, 811(combined)

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

(b) Fraud;

C. Violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission

1.(a)(c) A;

2.C. B Stock Company

In case of transfer file, and in case of a trial, a trial shall be held.

Law Firm SPP (for all the defendants)

Attorney Kim Sang-hoon

October 25, 2018

Defendant A shall be punished by imprisonment with prison labor for up to six years, and by a fine of up to 20 million won.

Criminal facts

1. Defendant A - 2018 Highis490

/ Presumed facts

The Defendant is the representative director of B Co., Ltd. (hereinafter referred to as “B”) with the purpose of cultural fund business in the 14th floor of Gangnam-gu Seoul Building D, Seoul. E is a person who has overall control over B’s business as a business director from March 15, 2016 to October 2016. F is a person who has practical control over B’s business of raising investment funds from March 15, 2016 to March 29, 2017.

[Public Offering of Fraud by Defendant and E]

Around January 2016, while operating G Co., Ltd. (hereinafter “G”), which is a telegraphic body of B (hereinafter “G”), the Defendant was aware of the fact that G’s capital is limited to KRW 200 million (the capital is increased to KRW 500 million) and that there is no business profit and that it is inevitable to prevent the return of the investment funds received from subordinated investors as profits. However, the Defendant planned to attract new investment by changing the name of the juristic person into B, make investments in the government, and receive the investment funds managed by H Co., Ltd. from unspecified investors, and then collected the investment funds managed by H Co., Ltd. (hereinafter “G”), and then would collect the investment funds from H Co., Ltd. (hereinafter “E”), and would like to receive the investment funds from the investment directors at the same time as the investment funds managed by H Co., Ltd. (hereinafter “the investment funds”). The Defendant would have been able to receive the investment funds from the investment directors at an unspecified rate of KRW 10 billion and to receive the investment funds from the investment directors for one year.

【Public Offering of Violation of the Act on the Regulation of Unauthorized Receipt of Claims by Defendants, E, and F] Defendant, and E: (a) made an investment agreement form with the content of guaranteeing principal and paying fixed earnings of at least 2% per month; and (b) made it possible for F to create an investment agreement form with the content of “in the event that the amount equivalent to KRW 2.5 billion of investment is recruited, the Company will find the head of the headquarters and pay the monthly amount of KRW 25 million and the monthly amount of KRW 25 million to the Company every month.” The F, with the consent of the above proposal, recommended the Defendant, E, and F to engage in the business of without registration.”

【Specific criminal facts

A. Defendant, E’s joint criminal conduct - Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and fraud, and E in the B office around March 15, 2016 through F, are only KRW 50 million in capital, and there is no business profit, and the victim K has an intention or ability to return the principal of the investment amount or to pay the profit. “B is a juristic person holding 10 billion in capital, and where 30% in capital is invested from investors, it is possible to receive 70% in capital from the Government. In addition, it is intended to receive a broadcasting station for creating L’s jobs and return the profits generated by producing and exporting the film to investors. In addition, it is planned to receive an additional profit-making business from the Government subsidy, and the representative director A is a person specialized in M&A; from 00 to 100,000 won in total from 20,000 won in the name of the victim, 10% in the name of the victim and 16% in the name of the victim.

Accordingly, in collusion with E, the Defendant acquired money from the victims (the damage amounting to KRW 650 million to the victim N, the damage amounting to KRW 570 million to the victim 0, the damage amounting to KRW 570 million to KRW 950 million to the victim P, the damage amounting to KRW 1 billion to KRW 50 million to the victim Q, and the damage amounting to KRW 1 billion to KRW 50 million to the victim Q, respectively);

B. Defendant, E, and F’s co-principal - Violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission

No one shall engage in a business of raising funds under the pretext of investments, etc. under an agreement to make payment of all or more investments in the future from many and unspecified persons without obtaining authorization or permission under finance-related Acts and subordinate statutes.

As above, the Defendant, in collusion with E, F, etc., did not obtain authorization or permission as described in the preceding paragraph, and received a total of KRW 9,426,510,000 from investors, such as K, etc., on a total of 446 occasions from around January 5, 2016 to March 29, 2017. Accordingly, the Defendant in collusion with E, F, etc. for a business of receiving without registration.

2. Defendant B - “2018 Highis811”

The defendant, a representative director of the defendant, performed the act of fund-raising without delay as described in paragraph (1)(b) above.

Summary of Evidence

“2018, 490

1. Defendant A’s legal statement

1. Each prosecutor's protocol of interrogation of the accused A, E, and R;

1. Each police interrogation protocol of the accused A, E, R, and F;

1. Each police statement of S, T, U, P, Q, Q, W, X, Y, Z, and F;

1. Account transactions (No. 87,88, 100 No. 100)

1. Investment agreement and list of deposits (No. 151 No. 151 of the evidence list);

1. A letter of introduction to a company (No. 152 No. 152) 2018, 811;

1. Defendant A’s legal statement

1. Each police suspect interrogation protocol against Defendant A and F;

1. Statement made by the police about 0;

1. Each personal investment agreement (No. 8-12 No. 12)

1. Copy of the corporate register (No. 14 number of evidence);

1. Application of Acts and subordinate statutes to investigation reports (Attachment Report of the first instance judgment to B) and accompanying documents (Evidence List No. 2-4);

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

A. Defendant A: Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 15256, Dec. 19, 2017; Act No. 15256, Mar. 20, 2018); Article 347(1), and Article 30 (1), and Article 347(1), and Article 30 (1) of the Criminal Act (including the fraud of N,O, P, and Q, and each victim) of the Criminal Act; Article 347(1), and Article 30 (1) of the Criminal Act of each of the victims of money; Article 6(1) and 3 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 15256, Dec. 19, 201; Act No. 15

(b) Defendant B: Articles 7, 6(1), and 3 (General Control) of the Act on the Regulation of Conducting Fund-Raising Business without Permission

1. Aggravation for concurrent crimes;

Defendant A: The reason for concurrent crimes resulting from the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and Article 37 of the Criminal Act, Article 38(1)2, and Article 50 of the Criminal Act.

1. Defendant A

(a) Scope of punishment by law: Imprisonment with prison labor for not less than three years but not more than 45 years;

(b) Scope of recommending sentencing criteria: Imprisonment with prison labor for not less than six years;

1) Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

[Determination of Punishment] Form 4 [Determination of Punishment of Specific Economic Crimes (Fraud), Violation of the Act on the Punishment of Specific Economic Crimes (Fraud), and Violation of the Act on the Punishment of Specific Economic Crimes (Fraud)] shall be determined on the basis of the aggregate of the amount of profit in each crime of fraud, according to the method of processing the same type of frauds as the systematic frauds

[Special Aggravation] ○ Aggravated Punishment: Where a person led or led to the commission of a fraud, or commits a crime for an unspecified or large number of unspecified victims or repeatedly over a considerable period of time.

○ Mitigation elements: the victim is also responsible for the occurrence of a crime or the expansion of damage;

[Recommendation Area and Scope of Recommendations] Aggravation, 6 years to 11 years (the 1/3th of the lowest limit is reduced as a result of the addition of the combination of the same types)

2) The sentencing criteria are not applied to the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, on the grounds that the sentencing criteria are not set.

3) Scope of recommending punishment based on the standards for handling multiple crimes: Imprisonment with prison labor for not less than six years (limited to the lower limit of the scope of sentencing in accordance with the standards for sentencing for crimes to which the sentencing criteria are applied, since a crime for which

C. Determination of sentence: The crime of this case 6 years in collusion with E, etc., by deceiving that the Defendant would pay high-amount profits if he/she invests in money to an unspecified number of unspecified victims, and thus, the nature of the crime is not very good. The total number of victims resulting from the fraud of this case reaches 100 persons and the amount of damage reaches 9 billion won. The Defendant was involved in the preparation of a false company letter as a representative director, promised to pay high-rate allowances to E, etc., ordered the solicitation of investors, and most of the investments was deposited into the account in the name of the Defendant. The Defendant led the instant crime, such as inducing employees to continue to attract investors even after the withdrawal of E and the de facto difficulties in return. Such circumstances are disadvantageous to the Defendant.

The Defendant recognized and reflected the instant crime. The instant crime is partially responsible for the occurrence of and the expansion of damage to the victims, such as not confirming the details of the project and the creation of profits for the victims, in a short period of time. Some victims do not wish to punish the Defendant. These circumstances are favorable to the Defendant.

Other factors of sentencing, such as the defendant's age, character and conduct, environment, motive, means and result of the crime, and circumstances after the crime, shall be determined as ordered in comprehensive consideration.

2. Defendant B

(a) Scope of punishment by law: Fines of not less than 50,000 won but not more than 50 million won;

(b) Non-application of the sentencing criteria: The sentencing criteria are not set for fines. Determination of sentencing shall be a fine of 20 million won;

The presiding judge, the highest judge;

Judges Gin-type money

Judges Shin Jae-ho