2012Gohap13A. Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

(Fraud)

2012Gohap14(combined)b.Fraud

2012 Gohap93(combined). Breach of trust.

2012 beginning 80 Orders for compensation

1. (a). (c) A

2. (a) B

Kim Jong-J, Park Jong-hee, Park Jong-hee, Kim Jong-Jak, Kim Jong-Jung, Lee Sung-Jung, Lee Sung-Jak (Trial)

Law Firm C (For the defendant)

Attorney D

E

January 15, 2013

Defendant A shall be punished by imprisonment with prison labor for a period of five and a half years, and by imprisonment for a period of three years, respectively. The application for compensation shall be dismissed.

Criminal facts

Defendant A is a person who conducts an auction consulting business under the trade name of “G from Chuncheon City F,” and Defendant B is a person in charge of the affairs such as the operation of the Internet site and the issuance of the auction information site in the above 'G'.

1. The sole criminal conduct of Defendant A;

가. 특정경제범죄가중처벌등에관한법률위반(사기) 피고인 A는 2008. 11. 10.경 춘천시 H에 있는 주식회사 | 사무실에서, 피해자 J에게 "지금 가지고 있는 부동산을 놀리지 말고 담보대출을 받아 투자를 하면, 은행대출 이자는 물론 월 630만 원씩 이득금을 지급해주고, 투자금 수익이 나면 수익금 50%를 주겠다"는 취지로 거짓말을 하였다.

However, at the time of graduation from an elementary school, Defendant A did not have received education at an authorized institution or obtained a certified certificate of qualification in relation to real estate investment, etc., and did not have actual experience in obtaining money from the court real estate auction. The victimJ received money under the pretext of investment, such as living expenses of himself/herself and his/her family members, corporation I, and it was thought that the above bank loan interest and monthly profit paid to the victimJ were paid to the victim J as the money received from the victim J. As such, Defendant A did not have any intent or ability to leave benefits as agreed upon by investing the money received from the victimJ in real estate development, auction, and loan. Defendant A was urged by the victimJ, and was transferred from the victimJ KRW 57,075 million on November 11, 2008.

(b) Fraud;

1) Fraud against the victim K

On April 7, 2009, Defendant A made a false statement to the JJ's wife K, who borrowed KRW 570,77550,000 from November 11, 2008 to the auction office of "G" on the third floor of the M&C building in Chuncheon City (hereinafter "the auction office of this case") (hereinafter "the auction office of this case") around November 11, 2008 that "if there are any surplus funds, it will make an investment, guarantee the second interest of the month, and return at any time when the demand for return is made."

However, at the time of graduation from an elementary school, Defendant A did not have received education at an authorized institution or obtained an authorized certificate of qualification in relation to real estate investment, etc., and there was no experience of actual profit-making through a court real estate auction. The victim received money under the pretext of investment, such as living expenses of himself/herself and his/her family members, and the amount of monthly profit paid to the victim was thought to be paid to the victim as the amount received from the above J or the amount received from the victim. Thus, Defendant A did not have any intent or ability to leave benefits as agreed upon by investing the money received from the victim in real estate development, auction, and mortgage loan. Accordingly, Defendant A deceiving the victim K as above, and received KRW 20 million from the victim K the total sum of KRW 50 million around May 15, 2009, KRW 70 million from the victim K.2)

On August 28, 2009, Defendant A made a false statement to the effect that Defendant A would repay 10 million won after three days if he/she borrowed 10 million won to the above victim, at the victim J's office located in Switzerland-si N, Chuncheon-si.

However, in fact, Defendant A did not have a certain amount of income at that time, and was thought to have immediately lent money borrowed from the victim J to another person, so even if having received money as a loan from the victim J, Defendant A did not have the intent or ability to repay the money more than three days as agreed upon. Accordingly, Defendant A was urged by the victim J, thereby receiving KRW 10 million from the victim J on the same day.

3) Fraud against victim P

Defendant A, at the auction office of this case on January 18, 2010, had been put up for auction to the victim P, and there was a false statement that Defendant A would be a high interest and profit and return at any time at the time of the request for return.

However, in fact, Defendant A had already been forced to return the amount of KRW 600 million received from another investor J at that time, and had not been realized in the real estate invested until that time, and there was no certain amount of income. Therefore, even if Defendant A received the investment money from the victim, the victim did not have the intent or ability to pay it at the date of the request for repayment.

Nevertheless, Defendant A, as seen above, by deceiving Victim P, received 250 million won from the Victim P on the same day, and then returned KRW 51 million on the following day to obtain 20 million from the Victim P, thereby defrauding KRW 200 million.

Defendant A continued to conclude that, around March 23, 2010, at the auction office of this case, Defendant A would return the real estate to the victim P at any time when the return is requested, as the cost of transferring the registration of the real estate in Macheon-si is required, in excess of KRW 53 million.

However, even if the above amount was borrowed from the victim P, the victim P did not have the intent or ability to repay it on the date when the victim P demanded repayment.

Nevertheless, Defendant A, as seen above, by deceiving Victim P, received a total of KRW 253 million from the Victim P, and subsequently acquired a total of KRW 253 million through two times on the same day.

4) Fraud against victim E

Defendant A made a false statement to the effect that, around May 16, 2010, Defendant A would complete the transfer of registration in the victim’s future, as the registration cost of the fifth floor building in Chuncheon City F, which was selected as a successful bidder, is insufficient.

However, Defendant A was thought to use the registration cost received from the victim E in registering the above building under the name of Defendant A, so even if the victim E receives the registration cost, Defendant A did not have any intention or ability to file the registration for transfer of ownership of the above building in the name of the victim E.

As a result, Defendant A deceiving the victim E and received 16 million won from the victim E on the same day.

C. Breach of trust

On November 17, 2010, Defendant A entered into a real estate sales contract with the content that the trade name in the So-dong, Busan City on November 17, 2010 may not be known, with the content that the actual operator of the victim S limited liability company (hereinafter referred to as “victim limited liability company”) shall pay 2.850 million won for the total purchase price and 250 million won for the down payment and the remainder to pay 130 million won for the down payment as of January 15, 201. On the same day, Defendant A signed a real estate sales contract with the content that the victim limited liability company (hereinafter referred to as “victim limited liability company”) shall be the victim limited liability company, and shall deliver 130 million won for the down payment as of January 15, 201 to the above T and completed the registration as the representative director of the victim company.

Therefore, the defendant has a duty to manage the victim limited liability company's property in good faith according to the purpose of the company.

On February 16, 2011, in violation of the above duties, the Defendant: (a) filed a registration of the right to claim ownership transfer based on the promise to sell and purchase the above land and buildings in order to secure the Defendant’s personal loan of KRW 170 million; (b) on February 16, 2011, the Defendant made a registration of the right to claim ownership transfer based on the promise to sell and purchase the above land and buildings; and (c) thereby, the Defendant had the instant company obtain pecuniary benefits equivalent to KRW 170 million from the instant company; and (d) had the victim limited liability company inflict loss equivalent to the same amount.

2. Defendants’ co-principal conduct

(a) Fraud;

At the auction office of this case around April 26, 2010, the Defendants made a false statement to the effect that “When the Defendants lend money to the victim E, two copies of interest shall be paid, and the principal shall be paid on the date when the principal is demanded to be repaid.”

However, in fact, Defendant A was in a state where the sum of KRW 580,750,00,000 received from J as stated in Section 1(A) at that time, and was demanded by J to return the said sum. Since no profit has been realized in the real estate invested until that time, there was no certain amount of income, the victim E did not have the intent or ability to repay the said amount at the date when the victim E demanded repayment. Defendant B also consumed the money received from J with Defendant A and was in a substantial charge of the above “G”’s accounting affairs. Accordingly, Defendant B was well aware.

The Defendants conspired to induce the victim E and received the remittance of KRW 24 million from the victim E on the same day, and received KRW 34,300,000,000 from April 27, 2010.

(b) Violation of the Act on the Aggravated Punishment of Specific Economic Crimes;

1) At the auction office of this case around May 13, 2010, the Defendants made a false statement to the effect that “the victim E is awarded a successful bid for the F-5th floor building in Chuncheon City (hereinafter “instant building”) when paying the money, and would allow the victim to move to the future.”

However, in fact, even if the defendants received money from the victim and received the bid for the building of this case, they thought that they will register the building of this case under the name of the defendant A. At that time, they were demanded by the above J to return KRW 58,750,000,000 from the above J, so it may be anticipated that the J will execute the bonds. Thus, even if they received money from the victim, they did not have any intent or ability to receive the bid for the building of this case and

The Defendants conspired to induce the victim E and received a total of KRW 250 million from the victim E on the same day, and received KRW 250 million from the victim E on May 14, 2010.

2) From the auction office of this case around June 10, 2010, the Defendants made a false statement to the effect that “If they lend money to the victim E rapidly, they would receive the AF deposit to move into the building of this case and repay it after one week, and make a transfer registration of ownership on the building.”

However, at that time, the Defendants thought that they would be able to repay their obligations to other creditors with the above AF deposit, and thought that they would use the money received from the victim E to receive a new real estate auction by combining the money borrowed from other persons, so even if they received money from the victim E as a loan, they did not have any intention or ability to make a repayment after one week, and there was no intention or ability to make a registration of ownership transfer for the above building under the name of the victim as described in the above paragraph (1).

The Defendants conspired to induce the victim E and received KRW 250 million from the victim E on the same day. Accordingly, the Defendants conspired to induce the victim E and received KRW 750 million in total by deceiving the victim E.

Summary of Evidence

1. Defendants’ respective legal statements

1. Each legal statement of witness E, J, K, and P;

1. T police statement;

1. Written statements and supplementary statements of J and E;

1. Each complaint filed in relation to E, J, K, and P;

1. Each application for carbon in E and K preparation;

1. Each certificate of borrowing;

1. Certificates of cash custody;

1. Each investment agreement;

1. A statement of performance;

1. A real estate sales contract;

1. Each detailed statement of investment;

1. Each content certification;

1. Notice;

1. Provision of a copy of each passbook, a deposit transaction document, a detailed statement of account transactions, a statement of bank account transactions in the name of the defendant, reply to a request for provision of financial information, and financial transaction information;

1. A certified copy of each register;

1. The voluntary auction of real estate (Chuncheon District Court AG);

1. Records of civil applications (Skcheon District Court 2010Kaga189), decisions to suspend compulsory execution (Skcheon District Court 2010Kaga189);

1. Payment receipt concerning the sale of the building;

1. Each report on investigation;

Application of Statutes

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

A. Defendant A

Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 347(1)2 of the Criminal Act, Article 347(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 347(1) and 30 of the Criminal Act (including fraud, fraud, choice of imprisonment), Article 347(1) of each Criminal Act, Articles 347(1) and 30 of the Criminal Act (the fraud of KRW 34.3 million for E), Article 355(2) and (1) of the Criminal Act (the selection of imprisonment), Article 355(2) of the Criminal Act (the selection of imprisonment

B. Defendant B

Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 347(1) and 30 of the Criminal Act (including fraud, inclusive) and Articles 347(1) and 30 of the Criminal Act (Fraud, Act on the Aggravated Punishment, etc. of Specific Economic Crimes, and Imprisonment 1. Concurrent Crimes

The former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act (for Defendant B, to the extent that the sum of the long-term punishments of the above crimes is aggregated)

1. Dismissal of an application for compensation order;

Articles 32(1) and 25(3)3 of the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings (the scope of liability for damages is not clear)

Judgment on the Defendants and defense counsel's assertion

1. Violation of each Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) against Defendant A and each fraud;

A. Defendant A and his defense counsel’s assertion

Defendant A is merely an employee of the victims and/or investment;

This part of the facts charged argues that there is no intention to commit fraud or at least the defendant A, because it was directly decided on the person, and made an investment in accordance with the agreement, but did not collect it properly, and since some interest has been paid to the victims or some repayment has been made.

(b) Fact of recognition;

According to the evidence duly adopted and examined by this Court, 1) Basic facts

After graduating from an elementary school, Defendant A merely conducted a public book related to auction on its own while carrying out an insurance company's agent, taxi business, etc., and did not have any certificate of qualification related to the real estate, Defendant A was holding an auction at the court on its own from around 2006 to around 2008 and awarded a contract for about 8 items of real estate realized profits, Defendant A had no real estate for real estate for profit, Defendant A had his father appointed the head of the SOTC police station to the victims, Defendant A was working as the ROTC officer, and she had many young children assist themselves as self-refiencing, with a large amount of services in society, and had a gold and coal mining business right, and the fact that Defendant A was carrying out road business.

2) On November 10, 2008, Defendant A, who violated the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) against the victim J, stated that the victim J would pay 6.3 billion won per month as well as bank loan interest, and would pay 50 billion won of the investment proceeds as 5.0 billion won in real estate with real estate auction, real estate development, and collateral loan. Accordingly, the victim J would not pay 6.7 billion won in real estate to Defendant A's investment funds at the location of the KJ's office, and it would not return 6.7 billion won in real estate funds to Defendant J's investment funds, other than the above 3.7 billion won in real estate funds. The victim J would not return 9.7 billion won in real estate funds to Defendant J's investment funds at the location of the KJ's office, and it would not return it to Defendant A's investment funds to Defendant D's 6.7 billion won in real estate funds.

3) Fraud against the victim K

Defendant A said, at the auction office of this case around April 7, 2009, that “If there is any surplus funds in the process of running the business, such as real estate mortgage loan, etc., Defendant A would make an investment, guarantee the interest on the second installment of each month, and return at any time.” Accordingly, the victim K wired KRW 20 million on the same day, and around May 15, 2009, K transferred KRW 50 million received from his mother, and paid KRW 70 million in total. The victim K continued to urge the refund of KRW 70 million from September 17, 2009 to around December 25, 2009; Defendant A paid the amount of KRW 10 million on or around May 15, 2009; Defendant A paid the amount of KRW 20 million on or around December 25, 2009; and Defendant A paid the amount of KRW 15 million on or around May 16, 2005.

4) Fraud against the victim J

A around August 28, 2009, Defendant A stated that “A shall pay 10 million won after three days if he/she borrowed 10 million won or more because he/she did not use the said money as a registration fee for Defendant’s children.” However, Defendant A, rather than using it as a registration fee for Defendant’s children, was lent to AJ; Defendant J stated that he/she did not lend her if he/she knew of the circumstances that the said Defendant lent her money to another person.

5) Fraud against victim P

On January 18, 2010, Defendant A entered into the auction office of this case with the victim P, "F 1,000,000 won or less," and "I will guarantee high interest and profit and return at any time at the time when the return of the real estate is requested." Accordingly, the victim P transferred KRW 251 million or less on the same day to the victim P, and finally remitted KRW 200 million after being refunded KRW 51 million or less, around January 26, 2010, Defendant A paid KRW 61,064,00 or less as auction deposit for the above real estate, and paid KRW 60,000,000,000 or less to the victim P, on February 4, 2010, it was necessary to obtain a refund of the maximum debt amount of KRW 1,500,000,000 or less from the victim P, and it was also necessary to obtain a successful bid amount of KRW 3,500,000 or more.

6) Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and fraud against victims E

On April 26, 2010, the Defendants stated that “the victim would pay two copies of interest if they were to borrow money to the victim E, shall be paid on the date when the principal is demanded to repay,” and accordingly, the victim E shall deposit KRW 24 billion with the victim on April 27, 2010, and shall transfer KRW 103 billion to the defendants on April 5, 201, and the defendants shall use KRW 34.3 billion in total for the above 5 billion interest and KRW 1.5 billion on the E-M building, except for the above 1.5 billion amount, the defendants lent KRW 5 billion to AL on 1.5 billion on 1.5 billion on 1.5 billion on 1.5 billion on 205 billion on 1.5 billion on 205 billion on 1.5 billion on 1 billion on 105 billion on 105 billion on 105 billion on 105 billion on 201 on 205.

7) Other Defendant A bears high-amount obligations, including the above victims’ obligations and obligations for loans to M& Livestock Industry Cooperatives. Accordingly, the establishment of a collateral security and provisional seizure exceeding the real value of the real estate under Defendant A’s name is established. Although some auction procedures are underway, the economic value of the said real estate is low and the amount of credit is high, and it can be acknowledged that it is difficult for the victims to receive the claims unless the priority holders are excluded.

C. Sub-decision

According to the above facts of recognition, this part of the facts charged against Defendant A can be found guilty of all the facts charged, including the criminal intent to acquire by fraud, and therefore, this part of the defendant A and his defense counsel's assertion is without merit.

2. Breach of trust against Defendant A

Defendant A asserts that the crime of breach of trust is not established merely because the victim limited liability company's obligation is provided as security.

However, according to the evidence duly adopted and examined by this court, T is the actual owner of the victim limited liability company. On April 6, 2010, under the victim limited liability company, awarded a bid for eight parcels of land, X, and above-ground bathing buildings under the victim limited liability company and completed the registration of ownership transfer on June 14, 2010. Defendant A entered into a sales contract with T on November 17, 2010 and paid the down payment amount of KRW 2.5 million. According to the above sales contract, Defendant A would pay the remainder of KRW 2.60 million until January 15, 201. However, in order for Defendant A to operate the above bath, it would be required to remodel the building within the above bath, and C would be required to take office within the representative director of the victim limited liability company prior to the payment of remainder, and C would also have the right to request for the registration of ownership transfer of the above real estate for the purpose of protecting the owner’s right to claim for the above transfer of ownership from the defendant 105 billion won.

According to the above facts of recognition, the defendant A and his defense counsel's assertion is without merit, since all of the facts charged against the defendant A are guilty.

3. Defendant B

Defendant B asserted that he was employed by Defendant A, and did not have recruited the crime of this case, and that he did not have an accounting day at the office, and that he did not have a position to be recruited.

According to the evidence duly adopted and investigated by this court, Defendant B was employed as an insurance solicitor (Financ Pal Plan, team leader) at NN corporation as an insurance solicitor (14 years) and was engaged in business such as management of the Internet site, fund management, etc., Defendant B was employed in G in order to increase real estate auction; Defendant B was also employed by introducing multiple victims to Defendant B; Defendant E was also aware of the victims’ introduction; Defendant B introduced a number of victims to Defendant B; Defendant B was also given a direct explanation of the overall contents of the instant building, including land and building; Defendant B was also given a direct explanation of the victim’s use of KRW 35 million; Defendant B was provided with an explanation from Defendant B; Defendant B was regularly transferred a certain amount to Defendant B from the head of Tong or passbook under the name of Defendant B; and Defendant B was also used for personal purposes.

According to the above facts of recognition, it is reasonable to view that Defendant B committed a crime in collusion with Defendant A, and all of the charges of this case against Defendant B are guilty. Thus, all of Defendant B and the defense counsel’s arguments are without merit.

Grounds for sentencing

1. Defendant A

(a) The scope of punishment: Imprisonment with prison labor for up to 45 years; and

(b) Fraud;

[Determination of Punishment] Type 3 (at least 500 million won, less than 5 billion won) among the general frauds of the fraud group

[Scope of Recommendation] Four years of imprisonment to Seven years of imprisonment (Aggravated Field)

[Special Persons] When a crime was committed against an unspecified or large number of unspecified victims or repeatedly during a considerable period of time.

[No person who is a general person]

(c) Breach of trust;

[Determination of Punishment] Type 2 (at least KRW 100,000, less than KRW 500,000) among the embezzlement and breach of trust crimes group

[Scope of Recommendation] One year to three years of imprisonment (basic area)

[No person who is a general person]

D. Determination of sentence: 4 years to 8 years and 6 months of imprisonment (the first crime maximum + 1/2 of the upper limit of the second crime). Determination of sentence

Although Defendant A had been punished for the same crime, he again committed the crime of this case, and the crime of this case was committed by deceiving many victims, by deceiving them total of KRW 1,740,050,000,000, and the crime of this case was committed in breach of trust with respect to KRW 1770,000,000, and in light of the content of the crime, the nature of the crime and the crime of this case is very bad, the amount of damage caused by the crime of this case is very large, and the victims are making it difficult for them to live due to the crime of this case, and even if the victims have not been compensated for damage and have failed to reach an agreement, Defendant A shall be punished strictly.

In addition, the age, character and conduct, the environment, the means and result of the crime, the circumstances after the crime, etc. of the above defendant A, including favorable circumstances, such as the fact that the defendant A has no record of punishment heavier than a suspended sentence, shall be determined as ordered by considering the various conditions of sentencing as shown in the argument of the case.

2. Defendant B

[Determination of Punishment] Type 3 (at least 500 million won, less than 5 billion won) among the general frauds of the fraud group

[Scope of Recommendation] Three years of imprisonment to six years of imprisonment (Basic Area)

【Special Convicted Person】

[No person who is a general person]

【Determination of Sentence】

Considering the fact that the crime of this case was committed by deceiving victims E and deceiving approximately KRW 784,30,000,000 in total, and the nature of the crime and the circumstances are very bad in light of the content thereof, the amount of damage caused by the crime of this case is very heavy, and the victim E suffers from difficulties in living due to damage caused by the crime of this case, and even if Defendant B did not compensate or reach an agreement, it is inevitable to strictly punish Defendant B.

However, in addition to the degree of Defendant B’s participation in the instant crime and the first offender who had no record of criminal punishment by Defendant B, the above Defendant’s age, character and conduct, environment, means and consequence of the instant crime, and the circumstances after the instant crime, etc., the punishment as ordered shall be determined by taking into account the various sentencing conditions indicated in the instant pleadings, such as the age, character and conduct,

presiding judge, judge Park Sang-gu

Judges Soh-hee

Judges Choi Jin-jin