2014Do16286 A. Computer, etc.

Violation of the Act on Second Punishment, etc. (Fraud)

(b) Bidding interference;

1. A;

2. B

Prosecutor

Attorney C (for the defendant A)

Attorney D (for the defendant B, the National Assembly)

Seoul High Court Decision 2014No2372 Decided November 14, 2014

February 12, 2015

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. First, we examine the Defendants’ fraud such as computer, etc., which is the primary charge.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, it is justifiable for the lower court to maintain the first instance judgment that acquitted the Defendants of this part of the facts charged on the grounds stated in its reasoning, and contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules

2. Next, we examine the Defendants as the ancillary charges of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud).

A. The deception as a requirement for fraud refers to any affirmative or passive act that extensively lacks the fiduciary duty and good faith to each other in a transactional relationship. It should be related to the facts that form the basis of judgment to allow an actor to engage in a property disposal act that the other party wants by omitting the other party in error. Whether a certain act constitutes deception that causes a mistake of another person should be determined generally and objectively by taking into account the specific circumstances at the time of the act, such as the transactional situation, other party’s knowledge, experience, occupation, etc. (see, e.g., Supreme Court Decision 2011Do48, Feb. 27, 2014).

B. The summary of this part of the facts charged is that the Defendants, in collusion with E, etc., installed a malicious program on the computers of the Incheon Metropolitan City po-gu Incheon Metropolitan City po-gu pool-gun and the bidder’s computer, which is the place of order, and notified the specific bidders of the bid price possible based on this, and let the financial commissioner of the ordering place select the specific bidders as the successful bidder, and acquired money in the name of the contract price as the successful bidder.

In regard to this, the lower court determined that this part of the facts charged was not guilty on the grounds of its reasoning, including the following: (a) the Defendants’ act of finding out the successful bidder through the information processing without authority does not constitute deception against the finance officer; and (b) the Defendants did not have the duty to inform the finance officer of the fact that the Defendants discovered the successful bidder’s bid price in a fraudulent manner; and (c) the finance officer cannot be deemed to have made a mistake because the finance officer determined the successful bidder based on the bid price and the bidder

C. However, the lower court’s determination is difficult to accept.

According to the reasoning of the lower judgment and the evidence duly admitted, the following facts and circumstances are revealed.

(1) The electronic tendering procedure for each facility construction of this case in which the Defendants participated is subject to the examination of qualifications. The electronic tendering procedure for the construction subject to the examination of qualifications is conducted in the order of the tender notice, the preparation of preliminary price, the bidding, the opening, the qualification examination, the selection of successful bidders, and the contract order. Specifically, the following are

(1) The finance officer at the place of order shall first give a public notice of tender.

(2) From the server of the Public Procurement Service through the computer for financial commissioner certified before opening the opening, 【15 reserve prices shall be created within the limit of 【3% of the basic construction cost, each reserve price and the corresponding lottery number shall be freely mixed with the finance officer’s certificate, and shall be transmitted and stored to the server of the Public Procurement Service.

(3) A bidder shall enter the bid amount using a certified computer for bidders during the bidding period, and then select at will two of the 15 numbers without indicating the preliminary price, and transmit and store such value to the server of the Public Procurement Service.

(4) At the time of opening a tender, the average estimated price shall be calculated by averaging the reserve price corresponding to the highest four numbers selected by the bidder automatically from the system, among the reserve price lottery numbers selected by the bidder, and the successful bidder shall be calculated by multiplying again by the bid rate.

(5) A finance officer shall examine the bidder's ability to perform the contract in the order of the bidder's bid reflected in the bid price nearest to the successful tender price, which is at least awarded a successful tender price, and shall determine the successful tenderer according to the combined scores by allocating specific points, such as construction experience, technical ability, and financial status, evaluation of performance capability, bid price, etc.

(2) However, the Defendants, along with E, installed the 15 preliminary price and its lottery number immediately before it was encrypted into the computer of the Incheon Metropolitan City po-gu, Incheon Metropolitan City, which is the place where the Defendants ordered the construction of each of the instant facilities, and selected the 4 preliminary price and its lottery number. The Defendants, upon entering the bid in the bidder’s computer, installed a malicious program that allows two preliminary price numbers selected in advance from among four lottery numbers designated by the Defendants to be transmitted to the National Integrated Electronic Procurement System of the Public Procurement Service (hereinafter referred to as the “One-Bater”) server of the Public Procurement Service. As a result, the Defendants decided that four lottery numbers designated by the Defendants selected by the four bidders were the highest four lottery numbers selected by the bidders, and further, the financial commissioner of the ordering office, who is unaware of the circumstances, determined the winning amount and the winning amount based on the average of the preliminary price corresponding to the four lottery numbers.

(3) Ultimately, the ordering office of each of the instant facilities construction is merely selecting only 15 preliminary prices, and the bid price and the expected amount, which form the basis for the calculation thereof, shall be determined through a transparent procedure, such as infinite four winning numbers by bidders during the bidding process. Although the final expected amount and the bid price cannot be known to the finance officer himself of the ordering office until the bidding procedure is completed, the Defendants actively manipulated the financial officer of the ordering office to determine the final expected amount and the bid price by the average expected amount according to the four winning numbers selected by him through the above unlawful act, and further, the Defendants believe that the final lowest tender price is the price determined by normal procedure and that the final highest tender price is the price maintained is the price maintained by the financial officer in the order of bidders who participated in the bidding near the price.

(4) In addition, a successful bidder is not determined as a successful bidder, but is determined as a successful bidder through a qualification examination to comprehensively examine construction experience, technical ability, financial status, etc. by documents submitted at the time of the tender. However, in fact, in the process of the qualification examination conducted by the finance commissioner, the performance evaluation shall be conducted by confirming whether the construction performance and management evaluation data submitted by the relevant association, etc. prior to the tender are abnormal. Accordingly, among the tender participants who fall under the above points, the successful bidder may be determined by a bidding near the successful bidder's bid price. Thus, the successful bidder's bid price in each of the instant bidding plays the most important role in the determination of the successful bidder.

Examining the facts pertaining to the act detrimental to fair competition in the bidding process in light of the legal principles as seen earlier, the Defendants: (a) operated the projected price of construction that became the basis for selecting a successful bidder in each of the instant bidding through a malicious program in advance and the bid price calculated accordingly; and (b) made the financial commissioner of the ordering agency believe that the price is a fair price determined normally without any unlawful act; and (c) made the specific bidder known the price and let him reflect it into the price nearest price; and (d) it is clear that the financial commissioner of the ordering agency did not select the specific bidder as the successful bidder by conducting the procedure for selecting the successful bidder based on the price determined by the above unlawful method if he knew such circumstances, and thus, the Defendants did not actively distort the process of determining the successful bidder's bid price and administered the bid price based on the bid price determined by illegal means; and (b) concluded the construction contract with the order manager or the person in charge of the tender in question and concluded the contract with the specific bidder as the successful bidder.

Nevertheless, the lower court determined that this part of the facts charged was not guilty solely on the grounds stated in its reasoning. In so determining, the lower court erred by misapprehending the legal doctrine on deception and causation in fraud, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

3. Meanwhile, the prosecutor appealed to the conviction of the lower judgment, but the petition of appeal or the appellate brief did not state the grounds of appeal as to this part.

4. Therefore, as long as the part on the crime of violation (Fraud) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, which is the ancillary charge of the judgment of the court below, should be reversed, the part on the crime of fraud, such as computer, etc., which is the primary charge subject to a single sentence against the Defendants, and the part on the crime of interference with bidding which is found guilty in the court below, should be reversed together

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Ko Young-han

Justices Lee In-bok

Justices Kim Yong-deok

Justices Kim So-young