2018No2816 A. Violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission

(b) Violation of the Door-to-Door Sales Act;

1. A;

2. B

3. C.

4. D;

5. E.

6. F;

7. G.

8. H;

9. I

Defendants

Kim Yong-man (Court) and Kim Young-ju (Court Decision)

Law Firm Dongba (for Defendant A)

[Defendant-Appellee] Plaintiff 1 and 3 others

Law Firm Sejong (For the defendant B)

[Defendant-Appellant]

Attorney Yellow-Gyeong (for the defendant C, G, I)

Attorney Dohn (for the defendant D)

Attorney Kim Young-gu (Defendant E and F)

Attorney Kim Jong-jin (Defendant H)

Seoul Central District Court Decision 2016 Godan9377, 2016 Godan9490 Decided September 5, 2018

(Consolidated) Judgment

January 9, 2019

Of the judgment below, the part against Defendant A, B, D, E, F, G, and I and the part against Defendant H shall be reversed.

Defendant A, Defendant D, E, and F shall be punished by imprisonment with prison labor for one year and six months, Defendant G, H, and I for ten months.

However, with respect to Defendant G, H, and I, the execution of each of the above punishments shall be suspended for two years from the date this judgment became final and conclusive. Defendant G, H, and I shall order each of 80 hours community service to Defendant G, H, and I. Defendant C’s appeal is dismissed.

1. Summary of grounds for appeal;

A. misunderstanding of facts and misapprehension of legal principles (the defendants except the defendants A and B)

1) Common relation relation K (the criminal facts of the case in 2016 Highest 9377 and 2016 Highest 9490) A (Defendant C, D, E, F, G, H, ID, and ID)

(1) Violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission

(1) Since K is not money, it does not constitute an act of raising funds even if it had another person make an investment in K to J.

② Since K is a good with a large price change, even if the Defendants explained to the effect that “the Defendants may receive K more than K with a large amount of money than K with a large amount of money invested,” it cannot be deemed that the Defendants agreed to guarantee the principal of the goods.

(2) Violation of the Door-to-Door Sales Act

1. Since K is goods, the investment in the instant J-related investment that it exchanges and exchanges with K does not constitute a monetary transaction under the pre-transaction of goods or services, or under the pre-transaction of goods or services.

② In the event of attracting new investors, K, which is promised to pay by the J, is not a consideration for investment attraction itself, but an additional K, which is additionally produced depending on the degree of contribution as extraction is large and efficient from the combined extraction method. Accordingly, it does not constitute a case where a multi-stage sales organization, etc. is used.

B) Defendant C

Defendant C merely introduced R as a simple investor the projects of J, and there is no fact that the principal has been guaranteed, and there has been no recommendations for investment with the president of the J or other co-defendants. In addition, Defendant C merely introduced the projects of the J to only one R, and thus, it cannot be said that Defendant C raised funds from many and unspecified persons.

C) Defendant D, E, and F

(1) The above Defendants merely explained general contents such as K’s concept, and did not attract investors for the J’s projects, and there was no fact in collusion with the J’s president, etc.

(2) Since July 30, 2014, the above Defendants notified that they would not enter into an additional contract with J, and prevented the Defendants from entering into an additional contract with respect to the surrounding persons. As such, at least after the above period, crimes committed after the above period are irrelevant to the above Defendants.

D) Defendant G and the first Defendants merely introduced the J’s business to V, and did not raise funds by soliciting investment, and did not intend to use the multi-level sales organization, etc.

E) Defendant H

(1) Each date and amount stated in the list of crimes (1) annexed to the lower judgment is merely a detailed statement of purchase of K at the domestic virtual currency exchange by U, V, etc., and this alone cannot be deemed to have specified the date and amount that the said person paid K to J, and thus, the date and amount of the crime was not specified or proved.

(2) Defendant H, as a simple investor of J’s business, opened N’s office from November 2014 to studies K-related offices, and did not recommend investment to V, etc., and did not agree with the president of J.

(3) The judgment of the court below denied the contents of Defendant H, thereby adopting as evidence a part of the statement of the police interrogation protocol against Defendant H, which has no admissibility of evidence, and thereby violating the rules of evidence.

2) Defendant D related to X (Defendant D, E, and F: 2016 Highest 9490 criminal facts of the instant case)

Defendant D was merely a simple investor, and there was no conspiracy or participation in Defendant E and F.

B) Defendant E and F Defendants are merely simple investors, and there was no public contest with Y, Z, and there was no fact that Defendant X operated the original branch of the corporation X, or recommended to make investments to W, AB, etc.

B. The judgment of the court below (the defendants A, B: imprisonment of one year and six months, defendants D, E, and F: imprisonment of two years, defendants C, G, H, I: imprisonment of ten months, suspended execution of ten months, community service hours of probation, 80 hours) is too unreasonable and unfair.

(a) Basic facts;

According to the evidence duly adopted and examined by the court below and the trial court, the following facts are recognized.

1) Summary of J projects

J in the United States, a company located in the United States, expressed that it mines K in the form of mining combination of mining sources, and L in Hong Kong operated the K transaction site. (1) If an investor opens his account in J-LK extraction business (hereinafter referred to as the "instant business") and enters K into the relevant account in the name of K mining rent, the investor withdraws and acquires it; (2) after three years thereafter, after extracting K by means of performance extraction corresponding to the above number of K; and (4) the investor withdraws the above received K to the account established in the Hong Kong Exchange and then transfers it to the K account in the domestic exchange in the country.

2) Activities such as the establishment of Defendant A and B companies and the invitation of investors

A) On January 2014, Defendant A recommended to participate in the instant project from persons related to J and Hong Kong L, and established AV corporation for the purpose of investing in the instant project together with AR, etc. around February 2014.

B) AV, around March 2014, introduced the instant project in Korea for the first time, directly recruited investors in the instant project, or was in charge of promoting and promoting the domestic project briefing sessions supervised by J and Hong Kong L. In this process, Defendant B, who invested in the instant project through Defendant A, also recruited investors.

C) On May 2014, when the instant AR was detained separately, Defendant A, B, etc. established a new L Co., Ltd. around June 2014 and Defendant A entrusted the representative director, and Defendant B, as a director, took charge of external affairs, such as marketing. L Co., Ltd promoted domestic and foreign business briefing sessions, etc. supervised by J and Hong Kong, and recruited participants in the event in Korea.

D) Defendant A and B changed the trade name of L Co., Ltd to zero stock companies in around October, 2014 (hereinafter “L Co., Ltd.”) (hereinafter “L Co., Ltd.”).

3) The circumstances leading to the instant investment by the Defendants and related persons

A) ① Defendant C, Defendant D, E, and F invested in the instant project through the introduction of Defendant A and B. ② Defendant G was the introduction of Defendant F and E, and Defendant G was the introduction of Defendant G, and Defendant 1 invested in each of the instant projects. Defendant H began an investment in the instant project with the introduction of Defendant B, and continued an additional investment with the description of Defendant E.

B) ① AR introduced and invested the instant project from Defendant C. ② The U first introduced and started investment in the instant project from Defendant I and G, and the AM and AO made investment through U.S. <3> AV first introduced and started investment in the instant project from Defendant I and G, and AL began to have been invested through V. ④ W and AB began investment upon introduction and commencement of the instant project from Defendant D, E, and F, and BF, BG, and BH were invested through W and AB.

B. Determination of the Defendants’ common assertion

1) Facts of recognition

According to the evidence duly adopted and examined by the court below and the trial court, including the materials introduced by the AJ Center(SJ Center No. 2), the following facts are recognized.

A) The profit structure of the instant project presented and explained by J, Defendant A, and B to investors is as follows.

○ 투자 수익- 'S' 프로그램은 K 30개를 투자하여 일 평균 0.66%의 K을 지급받아 연 수익률이 143%에 달한다.‘T 프로그램은 K 90개를 투자하여 일 평균 0.85%의 K을 지급받아 연 수익률이 225%에 달한다.-- 100%의 ROI(투자수익률)로 100일 이내에 빠른 투자 회수가 가능하며, S은 5개월, T은4개월이면 원금을 회수한다.○ 마케팅 수익| 새로운 투자자를 추천하면 위 투자자의 채굴기는 추천한 투자자의 채굴기 하위로 3개의 라인(채굴구역)을 형성하며, 이는 해당 채굴구역에 속한 채굴기 수에 따라 최대 채굴구역(대실적), 2대 채굴구역(중실적), 최소 채굴구역(소실적)으로 분류된다.| 새로운 투자자를 추천하여 '추천인' 또는 ‘후원인으로 등록된 투자자들은 각 단계의하위 투자자(채굴기)들에 의해 형성된 모든 2대 채굴구역(중실적)에서 채굴된 K의15~20%, 모든 최소 채굴구역 (소실적)에서 채굴된 K의 25~30%를 공동으로 배당받는다.

B) In order for an investor to make an investment more than a certain scale, J has established conditions to invite subordinate investors to be registered as a sponsor or a recommending person, and have the new investors register the recommending person and sponsor at the time of joining the new investor.

2) Specific determination

A) Whether it constitutes “financing” and “money transaction”

K is a kind of so-called virtual currency that is electronically transferred, stored, and traded with the economic value digitalized (Supreme Court Decision 2018Do3619 Decided May 30, 2018). In full view of the nature of K and the fact that the investors of the instant case recognized K as investment funds by purchasing K solely for the purpose of investing in the instant business, and that the procedure for realizing the profit of the instant business is scheduled not only to acquire K but also to exchange K acquired in real currency, it is reasonable to deem the instant business to be a monetary transaction only by using K as a unit or intermediary for calculating or receiving investment funds and its substance. Accordingly, the offering of investment in the instant business constitutes an act of raising funds as stipulated in Article 2 of the Act on the Regulation of Temporary Sales, etc., and also constitutes a transaction of goods, etc. by pretending to do so or making actual monetary transactions without permission as stipulated in Article 24(1)1 of the Door-to-Door Sales, etc. Act.

B) As the court below properly explained, it is reasonable to view that the business of this case is to pay K in excess of the amount of investment in the project of this case as profit-making unit, and that K in the business of this case is to calculate the investment amount. Ultimately, it is reasonable to view that K has agreed to pay the total amount of investment in the future or the amount in excess of the investment amount in the project of this case. Since the content of the investment of this case and the fact that the parties are well aware of the fact that there are separate circumstances unrelated to the content of the investment of this case and the failure, the contents of the business of this case cannot be assessed on the basis of the possibility of market price fluctuations. Moreover, the business explanation of this case explicitly includes the content that "the principal shall be recovered within 4 to 5 months with the investment return of 100%." In full view of the above, it is assumed that the agreement is to pay the total amount of investment or the amount in excess of the investment amount.

C) Whether a multi-level marketing organization or similar organization has been used for a "multi-level marketing organization or any similar organization consisting of persons by stages."

(1) The term “multi-level marketing organization” means an organization in which (i) a sales salesperson affiliated with a sales business entity solicits a certain person to join as a subordinate sales salesperson of the relevant sales business entity; (ii) a sales salesperson’s joining at least three levels is carried out in stages; and (iii) a sales business entity pays economic benefits related to the sales performance of another sales salesperson to a sales salesperson (Article 2 subparag. 5 and 9 of the Door-to-Door Sales, etc. Act), and “a sales business entity comprised of persons by stages similar to that of a sales salesperson,” is not a multi-level marketing organization, but is an organization that has substantial constituent elements of multi-level marketing (see, e.g., Constitutional Court Order 2009Hun-Ba329, Apr. 24, 2012).

(2) In the case of the instant business, ① an investor is required to recruit new investors and be registered as a recommendationer or a sponsor, as well as to make an investment exceeding a certain scale. ② An investor newly recruited is registered as a subordinate investor of the said recommendationer or a sponsor, and its relationship may be generated without any restriction on various stages. ③ When a subordinate investor is registered, allowances equivalent to the percentage of K’s profits are paid to the recommending entity or a sponsor. In light of the foregoing, the instant business has a substantial part of the conceptual elements of multi-level marketing as seen above, and thus, it is inevitable to deem that it has the substance of multi-level marketing as a multi-level marketing organization.

(3) The Defendants asserted that, in light of the characteristics of KK’s extraction, if the extraction period is added due to new investments, the efficiency of extraction would be enhanced, and that the allowances to be paid to the recommended persons or supporters in the instant project is merely an additional distribution of K produced due to the efficiency of extraction, not an investment cost. However, if additional profits are made due to the efficiency of extraction, it is reasonable to allocate the additional profits to all investors participating in the relevant extraction without the distinction of ordinary and lower-ranking investors, but it is reasonable to allocate them only to the recommending persons or investors who are supporters. However, it is difficult to deem that only distribution is made to investors as a sponsor.

D) Sub-determination

Therefore, this part of the Defendants’ assertion is without merit. Determination of Defendant C’s assertion is without merit.

1) Relevant legal principles

In relation to co-offenders who jointly process two or more persons in a crime, the conspiracy is not a legally required type of punishment, but a combination of two or more persons to jointly process a crime and realize the crime. Thus, even if there was no process of the whole conspiracy, if there was no process of the conspiracy between several persons, in order or impliedly, and the combination of their intent is formed, the conspiracy relationship is established. A person who is not directly involved in the conduct of the crime is held liable as co-principal even if he/she did not participate in the conduct of the conspiracy (see, e.g., Supreme Court Decision 2007Do2144, Jun. 1, 2007).

2) Specific determination

According to the evidence duly adopted and examined by the court below, including the statement made at the court below in the court below, and the court below and the party court, the defendant C invested in the business of this case after hearing the explanation about the profit structure, etc. of the business of this case as seen earlier from the defendant A and B around April 2014, and the defendant C after the end of June 2014 shows the PPT data containing the above contents and its revenue status to R, and the price of K will rise rapidly in the future. In the case of S program, the principal may be recovered at 143% per annum and 5 months per annum, and the fact that R commenced to invest in the business of this case can be recognized.

In light of the above facts in light of the above legal principles, it is reasonable to view that Defendant C, while well aware of the details and profit structure of the instant business that actually used a multi-level organization, guarantees the principal of the instant business and raises funds from many unspecified persons, Defendant C had R invest in the instant business. As such, as long as Defendant C recommended to make an investment only with 1 R, it does not interfere with the joint principal offender’s liability for the violation of the Act on the Regulation on the Regulation of Conducting Fund-Raising Business Similar to and without Permission, even if Defendant C recommended to make an investment.

3) Sub-determination

Therefore, this part of Defendant C’s assertion is without merit.

D. Determination on Defendant D, E, and F’s assertion

1) According to the evidence duly admitted and examined by the court below and the court below, including ① Defendant D, E, B, B, and H-related parts of the crime list (1) Nos. 14, 15, and 28 of the crime list (1) and the annexed crime list (2) in the prosecution, Defendant E, and F-related parts of the crime list in the interrogation of suspect; Defendant E- and F-related statements in the interrogation of suspect; Defendant I and G made statements in the police in the interrogation of suspect; W made statements in the police at the time of the investigation of suspect; W made statements in the second police examination of the F; and evidence of the second police examination of the F-related principal; it is reasonable to view that Defendant B, E, and F took part in the above business by obtaining explanation of the profits of the above business from Defendant A and B; and ② the above Defendants’ investment during the interrogation of the investment structure and its structure to explain the investment during the interrogation of suspect B from May 2014 to 3 B, 200.

Therefore, this part of the Defendants’ assertion is without merit.

2) V and AI-related parts (the first instance court-related crime sight table (1) Nos. 16 through 27)

When one of the co-principals, in the case of conspiracys, deserts from the relation of conspiracys before the others reach the commission of the act, he shall not be held liable as a co-principal with respect to the subsequent acts of the other conspiracys (see, e.g., Supreme Court Decision 95Do955, Jul. 11, 1995).

According to the statements made by U and G, H, and F in the lower court’s court’s court at the time of police investigation, Defendant D, E, and F, at around August 28, 2014, went into the J, and Hong Kong’s investment presentation session, and then suspended the investment solicitation of the instant project and notified the surrounding persons, including Defendant G, and H, of the same purport. Accordingly, the above Defendants were deemed to have escaped from a public recruitment relationship with respect to the instant project, and it is reasonable to view that they do not bear liability as a co-principal with respect to the investment by Defendant G, I, and H from September 12, 2014 to September 12, 2014.

Nevertheless, the judgment of the court below which found the above defendants guilty shall be deemed to have erred by mistake of fact, and this part of the above defendants' assertion is with merit.

E. Determination on Defendant G. I’s assertion

According to the evidence duly adopted and examined by Defendant G, including the statement made by Defendant G in the court below at the court below, Defendant G, and the statement made by the court below at each of the police interrogations, and the statement made by the court below at the court below and the court below at the court below and the court below. ① around June 2014, Defendant G, and I invested in the instant project with Defendant D, E, and F with the explanation of the above business profit structure, etc. ② the above Defendants introduced the instant project to the neighboring branch, etc., and recommended U to make an investment by explaining the profit structure of the instant project in July 2014; ③ from around August 2014, 2014, it is reasonable to explain that K was able to make an investment with the aforementioned U.S. 1 billion won by explaining the profit structure of the instant project; and (4) even if it was possible to make an investment with the U.K 100 billion won’s funds, it is also reasonable to recognize that the above investment was made by the U.K 1000 billion won.

Therefore, this part of the Defendants’ assertion is without merit.

F. Determination on Defendant H’s assertion

1) Whether the facts charged are specified

The purport of Article 254(4) of the Criminal Procedure Act to specify the date, time, place, and method of a crime is to limit the scope of trial against the court and facilitate the exercise of the right of defense by specifying the scope of defense against the defendant. Thus, considering the nature of the indicted crime, it is sufficient to specify the facts constituting the grounds for the indictment by stating the time, time, place, method, purpose, etc. to the extent that it can distinguish the facts constituting the grounds for the prosecution from those of other facts. Even if some of them are unclear, the facts charged can be specified along with the stated other matters. Thus, if the defendant's exercise of his right of defense is not impeded (see, e.g., Supreme Court Decision 2010Do2556, Apr. 29, 201), the effect of the indictment does not affect (see, e.g., Supreme Court Decision 2010Do2556, Apr. 29, 201).

2) Whether the participation in the conspiracy about V and AI parts is involved

A) According to the evidence duly adopted and examined by the court below and the court below and the court below, including the statements made in the court below at the court below's trial, the statements made in the suspect interrogation of each police officer, and the ① Defendant H has invested in the instant business after hearing explanations from Defendant B and Defendant E about the profit structure, etc. of the instant business from July 2014. ② After Defendant H has opened an office in Gangnam-gu Seoul, Seoul, and made an invitation to attract investors of the instant business with Defendant G and I around September 2014, it is reasonable to view that Defendant G and I had Defendant G, and V, who were in receipt of I, participate in the instant business in addition to the instant business from September 2014; ③ Accordingly, Defendant H has been aware of the details and investment structure of the instant business, such as the instant case’s offering of money and investment funds among many unspecified members.

B) However, even if V is based on the statement made by the court below at the court below, it appears that V invested in the instant business only before December 5, 2014, which was completely interrupted by the instant business. Thus, the part of the crime list (1) Nos. 22 and 24 attached to the court below to the purport that Defendant H et al. purchased K in December 28, 2014 each of the 1.2 million won and 5 million won and made it invested in J around that time, is inconsistent with the above facts, and there is no other evidence to acknowledge it. Nevertheless, the court below which found him guilty of this part is erroneous in the misunderstanding of facts, and the Defendant H’s assertion pointing this out is with merit.

3) Whether the rules of evidence are violated

On the other hand, the lower court, which denied the content of Defendant H, adopted a part of the statement of the police interrogation protocol against Defendant H without admissibility as evidence of guilt, and the lower court’s judgment, erred by violating the rules of evidence. The Defendant H’s assertion pointing this out is with merit.

ex officio determination as to company, defendant A, B, G, and I

Where the judgment of the court below is reversed for the defendant, and the reasons for reversal are common to the co-defendant who appealed (Article 364-2 of the Criminal Procedure Act), the judgment of the court below shall also be reversed as to the co-defendant (Article 364-2). However, in the case of the defendant A, B, G, and I's charges concerning the defendant A, B, and I, there are grounds for reversal of facts against the defendant H, and the reasons for reversal of facts are common to the above defendants. Thus, the part against the above defendants in the judgment of the court below can no longer be maintained.

3. Determination on X-related parts of the corporation

According to the evidence duly adopted and duly examined by the lower court and the court, ① Defendant E and F received investment recommendations from Y, 1, Z, a business operator of X branch office, Z, AF, a higher-class investor, and ② Defendant D, E, and F have opened and invested Gu shares in X on September 17, 2014, and explained and recommended the above business to W and AB from October 30, 2014; ③ Accordingly, Defendant E, BH, BJ, BL, BF, BM, BM, NA, BO, and BP, a business operator of X branch office of the Republic of Korea on September 2014. Accordingly, it is reasonable to deem that the above Defendants conspired with the above Defendants to make an investment in the business.

4. Determination on Defendant C’s assertion of unreasonable sentencing

The facts that Defendant C did not play a leading role in the crime, that there was no history of criminal punishment, and that R invested by Defendant C does not want to be punished by Defendant C are favorable to the Defendant.

However, the fact that the amount of investment recruited by Defendant C is a large amount of investment, and that a considerable portion of it was caused by the loss of investors is disadvantageous to Defendant C. Taking into account such circumstances and various sentencing conditions, including the Defendant C’s age, character and conduct, environment, circumstances before and after the commission of the crime, the lower court’s punishment is too unreasonable. This part of the Defendant C’s assertion is without merit.

5. Conclusion

Therefore, there are some grounds for appeal by Defendant D, E, F, and H, and there are grounds for ex officio reversal as above to Defendant A, B, G, and I. Thus, without examining the above Defendants’ assertion of unfair sentencing, Articles 362(2), 362(6), and 364-2 of the Criminal Procedure Act are reversed, and the part against the above Defendants (guilty part against Defendant H) in the judgment below is again decided as follows through pleading. Meanwhile, Defendant C’s appeal is without merit, and it is dismissed in accordance with Article 364(4) of the Criminal Procedure Act.

【Grounds for the judgment again rendered against the remaining Defendants except Defendant C】 Summary of facts constituting a crime and evidence

The summary of the facts charged by this court and the evidence related thereto are as follows. 1) The part of the facts charged in the court below's '2, defendant A, B, D, E, F, H, G, and I's joint criminal conduct' is changed as follows. 2) The summary of the evidence is as follows: ① delete the police interrogation protocol of the defendant B, F, and H from the part on the defendant A and B; ② delete the police interrogation protocol of the police officer's interrogation protocol of the defendant A and the police officer's interrogation protocol of the defendant H, and delete the police officer's interrogation protocol of the defendant A and I from the part on the defendant H.

【Revised Crime】

2. Joint offenses committed by Defendant A, B, D, E, F, G, and I

A. From July 8, 2014 to July 10, 2014, Defendant D, E, F, G, and I explained about K extraction business to U as described in paragraph 1(a) and explained to U on July 10, 2014, Defendant D, E, F, G, and I agreed to purchase K at K’s account in excess of KRW 18,00,000 from the K site of Korea to send it to J’s account without obtaining permission from many and unspecified members for the purpose of purchasing more than KRW 54,00,000 in total three times from July 10, 2014 to August 4, 2014.

(b) Violation of the Door-to-Door Sales Act;

No one shall conduct any financial transaction without any transaction of goods, etc., or make any actual financial transaction under the pre-stage sales organization or any similar organization composed of persons who have joined a multi-stage sales organization, in disguise of any transaction of goods, etc.

Nevertheless, the Defendants conspired to explain the contents of the business explanation set forth in paragraph 1(a) at the time and at the place set forth in paragraph 2(a) of this Article, and explain the contents of the business explanation set forth in paragraph 1(3). By using the de facto multi-stage sales organization that solicits preexisting entrepreneurs to join the business entity, and pays recommended allowances and bonuses to the business entity in three or more stages, the Defendants themselves cannot be used or consumed, and, in fact, issues and delivers K, which is money or money value in electronic form, or virtual currency that can be used as information on the certificate or money value stored and issued in electronic form, thereby acquiring K equivalent to KRW 54,00,000,000 in total three times, such as the list of crimes set forth in subparagraph 14, 15, and 28 of the judgment below. Accordingly, the Defendants conspired with the Chairman, etc. of the J's "J" in collusioned the transaction of goods or services without any transaction of goods or services through a multi-stage sales organization or similar organization.

3. Joint offenses committed by Defendant A, B, H, G, and I

A. From September 12, 2014 to December 12, 2014, Defendant H, G, and I explained toV on K extraction business at the seat of the Gangnam-gu Seoul Building BT head office, etc. and explained toV as referred to in subparagraph 1(a) and made V purchase at the K K site of Korea on September 12, 2014 and sent K amount equivalent to KRW 44,00,000 to J’s account. Moreover, Defendant H, G, and I agreed to purchase more than KRW 16 to 21,23, 25, or 27 from September 12, 2014 to obtain the full amount of money invested from many and unspecified members for business purposes than 279,59,69, etc. from September 12, 2014 to December 1, 2014 and received the full amount of money from the Defendants’ account.

(b) Violation of the Door-to-Door Sales Act;

No one shall conduct any financial transaction without any transaction of goods, etc., or make any actual financial transaction under the pre-stage sales organization or any similar organization composed of persons who have joined a multi-stage sales organization, in disguise of any transaction of goods, etc.

Nevertheless, the Defendants conspired to explain the same contents as three of the description of the business in paragraph (1) at the time and place specified in paragraph (3) above, and by using the de facto multi-level sales organization that solicits existing enterprisers to join the business entity as subordinate business entities and provides the business entity with recommendations, allowances, and support allowances, etc., the Defendants themselves cannot be used or consumed, and by issuing and delivering K, which is a certificate or virtual currency that can be issued with money or monetary value stored and issued by electronic means, or information on such certificate, as stated in the list of crimes (1) Nos. 16 through 21, 23, 25 through 27 of the judgment below, thereby acquiring K in total of 279,641,592 won, including 10 times in total, as stated in the list of crimes (1) of the judgment below.

Accordingly, in collusion with the chairman of the JJ's "J" company and others, the Defendants used a multi-level sales organization or a multi-level similar organization to make transactions of goods or services only without the transaction of goods or services.

Application of Statutes

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

Defendants: Articles 6(1) and 3 of the Act on the Regulation of Conducting Fund-Raising Business without Permission; Article 30 of the Criminal Act ( comprehensively including the violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission); Articles 58(1)4 and 24(1)1 of the Door-to-Door Sales Act; Article 30 of the Criminal Act ( comprehensively including the violation of the Door-to-Door Sales, etc. Act; Article 30 of the Criminal Act);

1. Aggravation for concurrent crimes;

Defendants: the former part of Article 37, Articles 38 (1) 2 and 50 of the Criminal Act (limited to concurrent crimes with punishment prescribed in violation of the Door-to-Door Sales, etc. Act heavier than punishment)

1. Suspension of execution;

Defendant G, H, and I: Article 62(1) of the Criminal Act

1. Social service order;

Defendant G, H, and I: Article 62-2 of the Criminal Act

Reasons for sentencing

1. Defendant A

The Defendant played a leading role, such as introducing the instant business in Korea and commencing the recruitment of investors, and as a result, there are many people who invested in the instant business, and the amount of investment is high, and considerable portion of it was caused by the loss of investors, is disadvantageous to the Defendant.

However, it is favorable to the defendant that the defendant recognized the crime and reflects it when it comes to the trial, and that there is no record of punishment for the same crime.

In addition to the above circumstances, various sentencing factors such as the defendant's age, character and conduct, environment, background of the crime, and circumstances before and after the crime are determined as ordered.

2. Defendant B

As an initial investor in the business of this case, the defendant played a leading role, such as inviting many investors, including co-defendants, and as a result, there are many people who have invested in the business of this case, and the amount of investment is large, and a considerable part of them has been caused by the loss of investors is disadvantageous to the defendant.

However, the fact that the defendant recognizes the crime of this case from the court below to reflect it, and that there is no record of punishment for the same crime is favorable to the defendant.

In addition to the above circumstances, various sentencing factors such as the defendant's age, character and conduct, environment, background of the crime, and circumstances before and after the crime are determined as ordered.

3. Defendant D, E, and F

After investing in the instant K business, the Defendants: (a) opened an office and actively recruited investors; and (b) recruited investors in the Company X-related business; and (c) played a big role in each crime. The Defendants’ invitation of investors to invest in each of the said businesses is a large amount of investment, and a considerable portion of the investment was caused by the loss of investors. This is disadvantageous to the Defendants.

However, there is no history that the Defendants were punished for the same kind of crime, and W does not want to be punished by Defendant D, but W does not want to be punished by Defendant D, and there is a circumstance favorable to the Defendants that X investors, who are co-offenders of the Defendants, would have recovered a considerable amount of the investment amount from Defendant Y, etc.

In addition to the above circumstances, various sentencing factors such as the defendants' age, character and conduct, environment, background of the crime, and circumstances before and after the crime are determined as ordered.

4. Defendant G, I

The fact that the Defendants did not have the power of criminal punishment, and that the degree of participation or role is relatively heavy is favorable to the Defendants.

However, there are many investors and investment amount involved in soliciting, and considerable parts of them are caused by losses of investors, and co-defendants continue to exist even after they ceased to attract investment and thereby expand damage to investors is disadvantageous to the Defendants.

In addition to the above circumstances, various sentencing factors such as the defendants' age, character and conduct, environment, background of the crime, and circumstances before and after the crime are determined as ordered.

5. Defendant H

The fact that the defendant has no record of punishment for the same kind of crime, and that the degree of participation or role is relatively heavy is favorable to the defendant.

However, there is no small amount of investment that the defendant participated in the solicitation and substantial part of it has been caused by the loss of the investors, and the co-defendant has continued to do so after the Co-defendant suspended the solicitation of investment and has increased the damage of the investors.

In addition to the above circumstances, various sentencing factors such as the defendant's age, character and conduct, environment, background of the crime, and circumstances before and after the crime are determined as ordered.

The acquittal portion

1. Defendant D, E, and F

A. Summary of this part of the facts charged

(1) From September 12, 2014 to December 28, 2014, Defendant D, E, and F, E, and H agreed to purchase K extraction business from the second floor office of the Suwon-si P&M from September 12, 2014, as stated in Section 1(a) of the crime of the lower judgment and agreed to purchase K equivalent to KRW 44,00,000 from the K site of Korea to the account of J and send it to the account of “J”. In addition, the lower court, as indicated in No. 16 to No. 27 of the Attached Table of Crimes (1) and No. 16 to December 28, 2014, and agreed to obtain the total amount of money from many and unspecified chairpersons or to obtain the said amount of money as the total amount of money exceeding KRW 281,400,00 from the Plaintiff’s account and the said Defendants’ account to obtain the said amount of money from “I” and the said Defendants’ account.

(2) Violation of the Door-to-Door Sales Act

No one shall conduct any financial transaction without any transaction of goods, etc., or make any actual financial transaction under the pre-stage sales organization or any similar organization composed of persons who have joined a multi-stage sales organization, in disguise of any transaction of goods, etc.

Nevertheless, Defendant D, E, and F conspired with A, B, G, I, and H, explain the same contents of the business explanation as set forth in Section 1(a) of the crime of the original instance at the time and at the place of the business explanation as set forth in Section 1(1) of the crime of the original instance, and, using the de facto multi-level sales organization in which specific persons are invited to join an existing business entity’s subordinate business entity for more than three stages, and for which subscription fees and bonuses are paid to a business entity for more than three stages, Defendant D, E, and F themselves issued and delivered certificates that cannot be used or consumed by themselves, or K, which is virtual currency that can be called money or monetary value stored and issued by electronic means, or information on such certificates, which can be called money or monetary value, as set forth in Section 16 through Section 27 of the List of Crimes (1) of the attached Table of the original judgment. Accordingly, the above Defendants acquired K equivalent to 281,341,592 won in total throughout 12 times, in collusion with the president of goods or services.

B. Determination

This part of the facts charged constitutes a case where there is no proof of a crime for the same reason as mentioned in the above 2.D.2. Therefore, the innocence should be pronounced pursuant to the latter part of Article 325 of the Criminal Procedure Act, but as long as it is found guilty of a criminal fact [2016Da9377] as stated in the judgment of each inclusive crime, and a violation of the Act on the Regulation of Conducting Receipt of Similar Goods and Door-to-Door Sales, etc. under Article 325

2. Defendant A, B, G, H, I

A. Summary of this part of the facts charged

(1) From September 12, 2014 to December 28, 2014, Defendant H, G, and I explained to V on the K extraction business at the second floor office of Suwon-si P building in violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission and explained to V on the ground of the facts stated in the lower judgment’s crime No. 1(a). On December 28, 2014, Defendant H, G, and I purchased K on two occasions a total of KRW 1,700,000 in total as shown in [Attachment 1] No. 22, 24 of the lower judgment.

As a result, the Defendants agreed to pay the full amount of investment or an amount in excess of it in order to engage in the business of raising funds from many unspecified persons without obtaining authorization or permission in collusion with the president of the JJ's president, etc.

(2) Violation of the Door-to-Door Sales Act

No one shall conduct any financial transaction without any transaction of goods, etc., or make any actual financial transaction under the pre-stage sales organization or any similar organization composed of persons who have joined a multi-stage sales organization, in disguise of any transaction of goods, etc.

Nevertheless, Defendant H, at the time and place as indicated in the above paragraph (1) above, explained the contents of the business explanation set forth in paragraph (1) of Section 1 of the crime of the original instance as follows: (a) among the contents of the business explanation set forth in paragraph (1) of the same paragraph, Defendant H, using a de facto multi-level sales organization that solicits a specific person to join an existing subordinate business entity, takes place at least three stages, and pays recommendation allowances and support allowances to a business entity, etc., Defendant H, by itself, issued and delivered K, which is a certificate that cannot be used or consumed, or virtual currency that can be called a certificate that is actually stored and issued by electronic means and is a money or monetary value, or a virtual currency that can be called an information on such certificate, he acquired K in the aggregate amounting to KRW 1,700,000,000 in total two times, such as the list of crimes set forth in Section 22, 24 of the original judgment. Accordingly, the Defendants conspired with the Chairman of “J”, thereby pretending only a transaction of goods or services, by using a multi-level sales organization or similar organization.

B. Determination

This part of the facts charged constitutes a case where there is no proof of a crime for the same reason as mentioned above 2.f. 2(b). Accordingly, a not-guilty verdict under the latter part of Article 325 of the Criminal Procedure Act should be made, but as long as it is found guilty of a crime (2016Da9377) in the judgment of the court below's violation of the Act on the Regulation of Conducting Receipt without Permission and the Act on Door-to-Door Sales, etc., as stated in

The presiding judge, senior judge;

Judges Kim Gin-han

Judges Doese