Defendant

Both parties

Clerks (prosecutions) and Kim Jong-ran (public trial)

Law Firm Kangn Law, Attorneys Kang Jae-soo et al.

Seoul Central District Court Decision 2016Da4214, 5153 (Consolidated), 7419 (Consolidated) Decided December 22, 2016

All the convictions and innocences of the judgment of the court below shall be reversed.

A defendant shall be punished by imprisonment for three years.

1. Summary of grounds for appeal;

A. Defendant

(1) misunderstanding of facts

The defendant did not deceiving victims and did not have the intention to commit the crime of defraudation.

(2) Legal principles

① Fraud against the victim Nonindicted 3: The damage to the victim Nonindicted 3 due to the cancellation of a collection order, or the Defendant’s pecuniary advantage does not occur.

② Invalidity of indication in the line of duty: The defendant's written agreement with Nonindicted 3, the creditor, to entirely cancel the execution of seizure, is different from the consent of the creditor, so even if the seized objects are moved without the approval of the execution officer, it does not constitute a case where the utility of the execution of seizure is harmed.

(3) Unreasonable sentencing

The sentence of the court below (two years and six months of imprisonment) is too unreasonable.

(b) Prosecutors;

(1) misunderstanding of facts (as to the acquittal portion of the lower judgment)

The Defendant established and operated two or more medical institutions.

(2) Unreasonable sentencing

The sentence of the court below is too uneased so that it is unfair.

2. Determination

A. Ex officio determination

According to the records submitted by the prosecutor in the health room and the trial room prior to the judgment on the grounds for appeal by the defendant, the defendant was sentenced on January 13, 2017 by the Seoul Central District Court for fraud, etc. on May 17, 2017, and the above judgment became final and conclusive on May 17, 2017. Since each of the crimes in the judgment of the court below, which became final and conclusive, are concurrent crimes under the latter part of Article 37 of the Criminal Act, the conviction portion of the judgment below cannot be maintained. However, even if the above reasons for reversal of authority exist, the argument of mistake of facts and misapprehension of legal principles by the defendant and

B. Judgment on the defendant's assertion of mistake of facts

In full view of the following circumstances recognized by the court below and the evidence duly adopted and investigated by the court below, the defendant can fully recognize the fact that he/she acquired financial benefits or acquired money by deceiving the victims as stated in the judgment below. The defendant's assertion of mistake of facts is without merit.

(1) The Defendant acquired, from Nonindicted 4, the “○○○○○ Department” located on the second and fourth floors of the Gangnam-gu Seoul ( Address 1 omitted), Gangnam-gu, Seoul (hereinafter “Seoul”), to operate it jointly with Nonindicted 3. On June 27, 2012, the Defendant acquired the ○○○○ Department in the name of Nonindicted 3 in KRW 45 million, and the Defendant also assumed the liability of KRW 6 billion at the time.

(2) On June 29, 2012, the Defendant entered into an agreement with Nonindicted 3 and ○○○○○○○ Department to operate the business as a partnership. According to the foregoing agreement, the Defendant and Nonindicted 3’s share ratio is 70:30.

(3) In accordance with the above business agreement, Nonindicted 3 invested KRW 310 million equivalent to his share in accordance with the said business agreement, but the Defendant failed to perform the promise to invest funds equivalent to his share, which led to a conflict with Nonindicted 3, and eventually, Nonindicted 3 left the business partnership and decided to operate the ○○○○○○.

(4) Around July 24, 2012, the Defendant acquired the ○○○○○ Department from Nonindicted 3 in KRW 500 million. Of them, Nonindicted 3 prepared a notarial deed of a monetary loan for consumption with respect to KRW 310 million, and prepared a loan certificate for the remainder of KRW 190 million.

(6) The Defendant had been operating with the name of the △△△△△△△△△△△△ located and operated separately on the first floor of the building in Gangnam-gu Seoul ( Address 2 omitted) and operated with Nonindicted 3’s ○○○○○○○○ in the building located in △△△△△△△△ which was transferred from Nonindicted 3, but had difficulties in dental operations, such as delaying the payment of dental staff and employees’ benefits and the rent for the hospital building, and failing to pay the prices for the dental materials of Nonindicted 5, etc.

(7) On November 2012, dental materials such as Nonindicted Co. 5, 2012, the Defendant’s bank deposit claims, ○○○○○ and hospital building lease claims were provisionally attached to the Defendant’s bank deposit claims, etc. The amount of the goods deposit claims amounted to KRW 170 million, including the amount of the claim of Nonindicted Co. 5’s company KRW 130 million.

(8) On November 27, 2012, Nonindicted 3 also seized the Defendant’s bank deposit claims, credit card sales claims with the ○○○○○○○○○○ level, etc. on the basis of the notarial deed of monetary loan for consumption of KRW 310 million received from the Defendant.

(9) On February 28, 2013, when the Defendant released Nonindicted 3 from the seizure of the above bonds, Nonindicted 3 agreed to transfer the said bonds to Nonindicted 3 with the ○○○○○○○○○ and the Bocomon on the second floor of △△ Building, and accordingly, Nonindicted 3 removed all of the above bonds seizure.

(10) When the Defendant delayed the payment of rent and management expenses for the second floor below △△ Building, Nonindicted 6, the lessor of the building, on March 11, 2013, started the procedure for the execution of surrendering the second floor below △△ Building, based on the said protocol, after having reconciliationd with the Defendant prior to filing a lawsuit.

(11) On April 8, 2013, Nonindicted 3 demanded that the Defendant pay KRW 600 million to Nonindicted 3, instead of transferring ○○○○○○○ and Bocomon steel and credit card sales claims, etc. on or around April 29, 2013. On or around May 3, 2013, Nonindicted 3 again seized the Defendant’s deposit claims, credit card sales claims, etc.

(12) On June 11, 2013, the Defendant: (a) directed the lessor of the second underground floor of △△△ building to the first and second floor of the △△△ building in Seoul Special Metropolitan City; and (b) transferred the first and second floor of the △△○○○○ building to the first and second floor of the △△△△△△△△. The Defendant, on June 12, 2013, opened and operated a “△△△△△△△” by lending Nonindicted Party 1 from the second floor of the Gangnam-gu Seoul ( Address 3 omitted) △○○○○○○ building to the second floor of the △△△△△△△△△ building in Seoul, and opened and operated the said building by changing it from the first floor to the first and second floor of the ○○○○○○ building in Seoul Special Metropolitan City to the second floor of Nonindicted Party 1.

(13) Although the Defendant promised to be responsible for the payment of the hospital building rent, various taxes, public charges, etc. arising from the operation of the △△△△△ Department in the name of Nonindicted 1, the Defendant delayed the payment of the hospital building rent, and failed to comply with the report and payment of the △△△△△ and employees on the 4 major insurance premium, global income tax return and the promise to raise funds on the sales accrued in the name of the △△△△△△△△△△△△△ and its name. Accordingly, Nonindicted 1 demanded the Defendant to take measures against the Defendant around November 4, 2013, but the Defendant did not take any particular measures, reported the closure of business with the △△△△△△△△△△ on December 24, 201

(14) On December 3, 2013, the Defendant: (a) entered Nonindicted 7, who is a well-known sexual surgery and doctor, and opened “○○○○○○○○○○○○○○○○○○○○○”, which is a sex capital, was expected to have monthly sales to be KRW 200 million; and (b) received investment KRW 150 million from Nonindicted 8 in the name of the victim Nonindicted 8 as the investment deposit of KRW ○○○○○○○○○○○○○○○○○○○○○; (c) on February 25, 2014, the Defendant is expected to have paid KRW 350 million monthly sales to Nonindicted 8; and (d) when additionally investing KRW 350,00,000,000,000,000 per month, paid KRW 12% interest per year; and (d) received KRW 120,000 on July 28, 2014.

(15) On November 2013, the Defendant borrowed KRW 100 million from the victim non-indicted 9 to the victim non-indicted 9 on the following grounds: “If the Defendant borrowed KRW 100 million as a result of the need for funds to go out of China through the establishment of a medical corporation, 60% of the corporation’s equity interest and 2% per month, and the principal shall be repaid.”

(16) Around that time, the Defendant had a financial institution’s debt exceeding KRW 400 million, and was responsible for Nonindicted 3’s debt amounting to KRW 500 million. Of these, the Defendant’s deposit claims, credit card sales claims, etc. were seized in relation to KRW 310 million, and the Defendant’s deposit claims, credit card sales claims, etc. were provisionally seized in relation to the Defendant’s claim for the return of the leased deposit amount against Nonindicted 5 Company 1, and Nonindicted 1 did not repay its debt amounting to KRW 200 million.

(17) On July 2014, the Defendant borrowed KRW 50 million from Nonindicted 9 and 10 million from Nonindicted 10, respectively, to the victim Nonindicted 9 and Nonindicted 10 to the effect that “If ○○○○ and operating capital are leased KRW 200 million, 4% per month shall be paid and the principal shall be repaid,” and on August 14, 2014, the Defendant borrowed KRW 50 million from Nonindicted 9 and KRW 150 million from Nonindicted 10.

C. Judgment on the Defendant’s misapprehension of legal principle

(1) As to the fraud against the victim non-indicted 3

If a creditor has seized a debtor's claim against a third party debtor but the seizure is cancelled, the debtor obtains a pecuniary benefit that would hold a claim against the third party debtor who has no burden on the seizure. The creditor who has cancelled the seizure due to the debtor's deception would incur a loss equivalent to the amount of the claim that would have been satisfied through the execution if the seizure had been maintained (see Supreme Court Decision 2007Do5507, Sept. 20, 2007, etc.).

The victim non-indicted 3, who belongs to the defendant's deception, released the seizure of credit card sales claims against the third debtor. Accordingly, the defendant obtained property gains that he has no burden on seizure, and the victim non-indicted 3 suffered loss equivalent to the security value of the seizure and collection order. This part of the defendant's assertion of misapprehension of legal principles is without merit.

(2) As to the invalidity of indication in the line of duty

There is no evidence to acknowledge that the Defendant drafted a written agreement with Nonindicted 3, the creditor, prior to the transfer of seized corporeal movables, to entirely cancel the execution of the seizure of corporeal movables. Even if there was a fact that such agreement was made, the mere fact that there was an agreement between the creditor and the debtor to cancel the execution of the seizure of corporeal movables, unless there was a disposition of revocation regarding the execution of the seizure of corporeal movables, does not extinguish the effect of the execution of the seizure order (see Supreme Court Decision 72Do1603, Aug. 29, 1972).

As long as the Defendant arbitrarily moves seized corporeal movables out of his jurisdiction without the approval of the execution officer, this constitutes a crime of invalidation of indication in the line of duty, since it undermines the utility of execution of seizure (see Supreme Court Decision 91Do894 delivered on May 26, 1992). The Defendant’s assertion of misapprehension of the legal principles on this part is without merit.

D. Judgment on the prosecutor's assertion of mistake of facts

(1) Relevant legal principles

Article 33(8) of the former Medical Service Act (amended by Act No. 11252, Feb. 1, 2012) which provides that "medical persons can only establish one medical institution." was amended to mean that "medical persons shall not establish and operate two or more medical institutions under any pretext."

In a case where a doctor who has already established and operated a council member in his/her own name employs another doctor and establishes a new council member under his/her name, and the council member directly performs a medical act in his/her own name, he/she cannot be exempted from liability for committing a crime of violation of the Medical Service Act because he/she constitutes a case where two or more medical institutions are established (see Supreme Court Decision 2003Do256, Oct. 23, 2003, etc.). This does not change solely on the ground that another doctor who is the name of the new council member directly performed a part of the council member or reported the establishment of the said two council members separately, and is virtually operated as a council member at the same place without separation from each other (see Supreme Court Decision 2006Do4652, Sept. 25, 2008).

In addition, in cases where a doctor who already establishes and operates a medical institution in his/her own name and engages in medical practice takes over an existing medical institution in which another doctor has already established and operates, without reporting or obtaining permission for change of the name of the founder under Article 33(5) of the Medical Service Act, or with a license leased from another doctor, excluding the previous founder by obtaining a report or permission for change of the name of the founder in the name of the doctor, and can be deemed to have practically controlled and managed the operation of the previous medical institution, such as the management of facilities and human resources of the medical institution, the implementation of medical business, the raising of necessary funds, and the transfer of the management performance, etc., the above doctor who already established and operates the medical institution in his/her own name constitutes a case where the previous founder operates the medical institution in duplicate (see Supreme Court Decision 2016Do1407, Oct. 13,

(2) Determination

According to the evidence duly adopted and examined by the court below and the court below, including the statement at the court of the first instance of the non-indicted 1 and the non-indicted 2, the defendant was registered as the business operator from the second floor of the building in Gangnam-gu in Seoul ( Address 2 omitted) to establish and operate the dental clinic from June 12, 2012, and the defendant actually transferred the name of the non-indicted 1 from the second floor of the building in Gangnam-gu ( Address 3 omitted) to December 24, 2013 to the second floor of the building in the Seoul ( Address 3 omitted), and from around April 15, 2014 to January 20, 2015 to establish and operate the dental clinic, the fact that the defendant used the above medical facilities and human resources to manage and operate the dental clinic, and the fact that the defendant actually transferred the name of the non-indicted 1 in the name of the non-indicted 2 from around 15, 2014 to around January 20, 2015.

The prosecutor's argument of mistake is justified.

3. Conclusion

As seen earlier, there exist grounds for ex officio reversal in the conviction portion of the lower judgment, and the prosecutor’s appeal against the acquittal portion of the lower judgment is with merit. Thus, without examining the Defendant and the prosecutor’s allegation of unfair sentencing, the lower judgment’s conviction portion and the acquittal portion are all reversed, and the lower court

All of the criminal facts stated in the judgment of the court below are added to "the defendant was sentenced on January 13, 2017 to imprisonment with prison labor for a crime of fraud, etc. at the Seoul Central District Court on May 17, 2017 and the above judgment became final and conclusive on May 17, 2017", and except for addition to the following criminal facts in violation of the Medical Service Act,

No medical person shall establish and operate at least two medical institutions under any pretext.

From June 12, 2012 to June 12, 2012, the Defendant: (a) registered as a business operator of “○○○ dental clinic” on the 2nd floor of the building in Gangnam-gu, Seoul; and (b) established and operated the dental hospital; (c) from June 12, 2013 to December 24, 2013, the Defendant established and operated the “△△△△△△△△△” on the 2nd floor of the Gangnam-gu Seoul ( Address 3 omitted); and (d) established and operated the “△△△△△△△” on the 4nd floor of the building in the above △△△△△△△△△, located as Nonindicted 2 on April 16, 2014, using the name of the business operator as Nonindicted 2.

The summary of the evidence in the judgment of the court below is as follows, except for adding "1. 1. witness 1. Nonindicted 1 and Nonindicted 2's trial statement, a copy of the prosecutor's protocol of examination of the defendant against the defendant, a copy of the prosecutor's protocol of examination of Nonindicted 1, a copy of the prosecutor's protocol of examination of the defendant, and a previous record in the judgment of the court of first instance: each Seoul Central District Court decision (2015Da5158, 2016No2335) and each of the Supreme Court rulings (20

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

Articles 347(1)(each fraud), 140(1)(the invalidation of the official indication) of the Criminal Act, Article 87(1)2, and Article 33(8) and 33(2)1(1) of the Medical Service Act, and each choice of imprisonment, respectively.

1. Handling concurrent crimes;

The latter part of Article 37 and Article 39(1) of the Criminal Act

1. Aggravation of concurrent crimes;

Article 37 (former part), Article 38 (1) 2, and Article 50 of the Criminal Act

The punishment shall be determined as ordered in consideration of the following individual circumstances and all of the sentencing conditions shown in the records and arguments of the case.

- Unfavorable circumstances: The amount acquired by the Defendant is a large amount, the fact that the Defendant does not seriously reflect, the fact that the victims did not reach an agreement, and the part of innocence of the lower court is found guilty in the trial, etc.

- A favorable circumstances: A part of the amount of damage has been recovered, the defendant has no criminal records exceeding the same criminal records or fines, and the defendant has not been tried simultaneously with fraud for which judgment has become final and conclusive.

Judges Osung U.S. (Presiding Judge) Kim Boo-young

주1) 공소장에 기재된 “◎◎◎길 ◁◁”는 오기임이 명백하므로 직권으로 정정한다.