Suncheon Criminal Defense Attorney | A Client Falsely Accused of Fraud, Acquitted on Appeal with the Attorney's Assistance

The client was the representative of a parking-lot manufacturing company.

One day, the client entered into a technology development agreement with Representative A of a sales company whom he had known for some time.

It was agreed that the client's company would develop a new technology and produce the related products, and that A's company would take charge of sales and marketing.

However, the client soon experienced difficulties in raising funds.

This was because orders for the products that the client had primarily been producing suddenly surged, requiring him to produce those products in large quantities.

The system was one in which the client first purchased and processed raw materials and then delivered them to a large construction company. Even after completing delivery, a certain amount of time was required before the price of the goods was finally settled, so it was difficult to immediately cover the cost of raw materials, which amounted to tens of millions of won.

In order to smoothly carry out the new development project agreed upon with A's company, this funding shortfall had to be resolved.

Accordingly, the client proposed to Representative A that A pay (lend) a certain amount as an advance order payment, and A agreed and handed over the money.

However, afterward, Representative A filed a complaint, alleging that the client had deceived him into giving the money by acting as if he had purchased the raw materials needed for the new project, even though he had not.

A also claimed that the client had deceived him by talking as if he would proceed with the project, even though the client had neither the intention nor the ability to develop the new project.

The first-instance court found that the client's act of deception was established and imposed a suspended sentence.

However, because the client had consistently contested the charges from the investigation stage, he decided to appeal.

Criminal Act, Article 347 (Fraud)

(1) A person who, by deceiving another, receives the delivery of property or obtains pecuniary advantage is subject to imprisonment for not more than ten years or a fine not exceeding 20 million won.

Elements for the Establishment of the Crime of Fraud

• - In order for the crime of fraud to be established, the following elements must be satisfied.

1> Act of Deception

: This refers to telling a lie and deceiving the other party in order to obtain property.

2> Mistake

: This refers to the other party believing such an act of deception.

3> Delivery (Act of Disposal)

: This refers to the other party, having fallen into a mistake, disposing of his or her own property or assets.

A claimed that the client, even though he had no plan to develop a new project, deceived him into giving money by saying that he had already purchased the product raw materials.

In doing so, A submitted as evidence the messenger conversation that he had exchanged with the client.

At the time, the client had sent A a text message stating, “I placed the order and made the payment,” and A claimed that the ‘order’ referred to here was an order for the production of the new development product.

However, the client's position was different.

The client's position was that the ‘order’ in the text message was for the existing product whose orders from the construction company had surged, and that, in light of the continuing requests for delivery, he had no choice but to proceed with purchasing raw materials and producing the product, so the message was one emphasizing that the funding shortfall of the client's company was continuing.

The Suncheon criminal defense attorney emphasized that, for the text message to serve as evidence of guilt, it would need to state “an order was placed for raw materials for the new development project product, rather than for the existing primary product,” but that, because no such content was set out, it should be regarded as having no evidentiary value.

The attorney further added that the time the text message was exchanged was well before the two had concluded the technology development agreement, and that purchasing tens of millions of won worth of raw materials for a project product that had not yet even been developed was difficult to accept even under the rule of experience.

Up until the trial, A asserted the client's fraud charge, claiming that “when the development project was delayed, the client even sent a false test report in order to reassure him.”

However, this claim by A was difficult to accept.

It is true that the client sent a test report at A's request, and that the document contained the test results of a product other than the new development project product originally agreed upon.

However, at the time, A was also aware that it was impossible to even prepare a test report for the new development product.

In the prosecutor's questioning as well, A himself stated that “a test report can be issued only when the product is perfectly completed.”

This also means that A himself was well aware of the process for issuing a test report.

Accordingly, the Suncheon criminal defense attorney asked, “If the development work for the new project had not yet been completed at the time, why did you ask the client to send a test report?” and, upon hearing this, A appeared very flustered.

After persistent questioning by the Suncheon criminal defense attorney, A effectively admitted that “he had thought the client would send a rough test report to be used for company promotion, rather than a test report for the new product.”

Even before being accused by A, the client had repaid more than half of the loan.

He continued repayment after the complaint as well, and repaid the entire loan before the pronouncement of the first-instance judgment.

This directly contradicts A's claim that the client had neither the intention nor the ability to repay the money.

In addition, the client had continuously made efforts to develop the new project as agreed, and, as a result, succeeded in developing a high-quality product and completed trademark registration and a patent application.

Citing these points, the Suncheon criminal defense attorney emphasized that, contrary to A's claim, the client did have the intention and ability to develop the product.

The client in the above case was found guilty of fraud at the first instance, but, with the help of the Suncheon criminal defense attorney, was acquitted on appeal and was able to clear his name.

In particular, in the case of the crime of fraud, whether there was an intent to deceive the other party becomes an important issue that determines guilt or innocence.

Because ‘intent’ must be proven, fierce arguments are often waged in court.

In particular, for criminal cases such as fraud, the initial response is most important, so the help of an attorney specializing in criminal matters is needed from the early stages of the investigation.

Daeryun LLC, to which the Suncheon criminal defense attorney belongs, has attorneys with extensive experience in trials related to fraud who provide tailored assistance to clients.

If you are facing a fraud charge, please visit Daeryun LLC, where the Suncheon criminal defense attorney is located.