[1] Legislative intent of Article 3 of the former Act on the Regulation of Conducting Fund-Raising Business without Permission, and standard for determining whether the revenue of funds mediating the transaction of goods constitutes an act of fund-raising without permission prohibited by the Act

[2] The meaning of "unspecified" under Article 2 of the Act on the Regulation of Conducting Fund-Raising Business without Permission

[3] In a case where an act of raising funds by recommending a person who is aware of that person to make a direct investment constitutes an act of fund-raising without delay prohibited under the Act on the Regulation of Conducting Fund-Raising Business without Permission, and where the subject of fund-raising is limited to a person of a specific occupation group, etc

[1] Articles 2 subparag. 1, 3, and 6(1) of the former Act on the Regulation of Conducting Fund-Raising Business without Permission (Amended by Act No. 10045, Feb. 4, 2010) / [2] Article 2 of the Act on the Regulation of Conducting Fund-Raising Business without Permission / [3] Articles 2, 3, and 6(1) of the same Act on the Regulation of Conducting Fund-Raising Business without Permission

[1] Supreme Court Decision 2003Do2213 Decided November 24, 2005, Supreme Court Decision 2006Do7470 Decided January 25, 2007 (Gong2007Sang, 401) Supreme Court Decision 2007Do472 Decided April 12, 2007 / [2/3] Supreme Court Decision 2012Do4640 Decided February 28, 2013 / [3] Supreme Court Decision 2006Do1614 Decided May 26, 2006 (Gong206Ha, 1224), Supreme Court Decision 2007Do4179 Decided August 23, 2007

Defendant 1 and one other

Prosecutor

Law Firm LLC (LLC, Attorneys Park Jong-sik et al., Counsel for the plaintiff-appellant)

Seoul Central District Court Decision 2011No4691 Decided May 11, 2012

The part of the judgment of the court below on the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission as to the payment of money listed in the annexed Table 2 through 7 of the crime sight table of the Seoul Central District Court is reversed, and the case is remanded to the Panel Division of the Seoul Central District Court.

The grounds of appeal are examined.

1. As to the ground of appeal on the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, as to the receipt of money listed in the annexed list 1 of the judgment of the court of first instance

Article 3 of the former Act on the Regulation of Conducting Fund-Raising Business without Permission (amended by Act No. 10045, Feb. 4, 2010); Article 2 Subparag. 1 of the same Act prohibits fund-raising business without permission (amended by Act No. 10045, Feb. 4, 2010); and Article 2 Subparag. 1 of the same Act prohibits fund-raising business without permission. The purpose of regulating fund-raising business without permission or authorization under relevant Acts and subordinate statutes is to protect good traders and to establish a sound financial order by regulating fund-raising business under the pretext of investment or deposit, etc. from many and unspecified persons without permission or authorization (see, e.g., Supreme Court Decision 2007Do4775, Jan. 25, 2007). In light of the legislative intent and the meaning of the term “contribution” under the above provision, it is difficult to deem the revenue of fund actually mediating a transaction of goods, and thus, it can be viewed as an act of fund-raising without permission under the same Act (see, etc.).

Based on the circumstances stated in its reasoning, the lower court maintained the first instance judgment which acquitted Defendants of violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, on the ground that the Defendants could not be deemed to have received only funds without actual goods transaction, by pretending or undermining the transaction of goods.

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s measure is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine

2. As to the ground of appeal on the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, as to the receipt of money listed in the annexed list 2 to 7 of the judgment below

A. Article 2 of the Act on the Regulation of Conducting Fund-Raising Business without Permission means that no specificness of the other party to the fund-raising business is emphasized. In addition, in light of the legislative intent, etc. of Article 3 of the same Act, if not only the fund-raising is made from those who do not have any knowledge of the other party to the fund-raising business but also the fund-raising business is not specified from the beginning date of planning the fund-raising business, even in cases where the fund-raising business is directly solicited to those who are aware of of the fact, it is reasonable to view that the fund-raising business constitutes an act of fund-raising from many and unspecified persons (see Supreme Court Decisions 2006Do1614, May 26, 2006; 2012Do4640, Feb. 28, 2013).

B. According to the reasoning of the judgment below, the court below found the Defendants not guilty of the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, on the grounds that the scope of the members of the ○○○○○ Mutual Aid Association is limited to persons with a specific occupation, which is a major, based on the circumstances in its reasoning, and it is difficult to say that even if the Defendants raised funds from persons without a direct awareness, it is difficult to say that even if they want to do so, they had the opportunity to participate in the investment. Thus, the Defendants’ fund-raising act does not constitute an act of fund-raising under the Act on the Regulation of Conducting Fund-Raising Business without Permission, and there is no other evidence to support the fact that the Defendants raised funds to persons other than a major.

C. However, this measure by the court below is not acceptable for the following reasons.

According to the facts admitted by the court below and the evidence duly admitted by the court of first instance, the eligibility to join the ○○○○○ Mutual Aid Association was limited to “the major who belongs to the National Council of Majors of Hospital,” but the opportunity was given to all majors who have joined the ○○○○○○○ Mutual Aid Association, and most of them were about 15,00 people who did not know about the 15,00 major nationwide number, and their scope was continuously increased, decreased, and changed. As such, the Defendants were forced to attract investors by advertising through the website, etc., sending a public letter soliciting membership, holding a hospital-type briefing session, etc., and the investors were also required to receive investors by indirectly receiving information through it, and paid money under the name of deposit as stated in the facts charged after determining whether to make an investment.

In light of these facts, the Defendants may be deemed to have received money as a deposit without asking their identity, characteristics, or mutual relationship, etc. as long as a person subject to financing is qualified to become a member of the ○○○○○ Mutual Aid Association.

Examining these circumstances in light of the legal principles as seen earlier, although the Defendants limited the eligibility for funding recipients to major in the Republic of Korea, the Defendants’ act of receiving deposits in such a way may be deemed as not individually specified from the beginning of planning the financing, and thus, it constitutes an act of raising funds from many and unspecified persons and constitutes an act of receiving deposits without permission prohibited by the Act on the Regulation of Conducting Fund-Raising Business without Permission.

D. Nevertheless, the lower court rendered not guilty of this part of the facts charged solely on the grounds stated in its reasoning. In so doing, the lower court erred by misapprehending the legal doctrine on “a large number of unspecified persons” under the Act on the Regulation of Conducting Fund-Raising Business without Permission, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal

3. Conclusion

Therefore, among the judgment of the court below, the payment of money listed in the annexed list 2 through 7 of the crime sight table of the court below

The part on the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim So-young (Presiding Justice)