Fraud Punishment Defense Case | A Non-Referral Decision for a Client Accused of Fraud Over Unrepaid Funds

The criminal defense attorney emphasized that, at the time the client borrowed the money, the client was actually operating the gas station and had a plan to repay the borrowed amount through the operating proceeds.

A Supreme Court decision (Supreme Court Decision 95Do3034, March 26, 1996) also holds that whether the crime of fraud by obtaining a loan through deception is established must be judged as of the time of the borrowing.

In addition, the attorney argued that the client had subsequently been unable to perform the obligation owing to sharp management difficulties, and that this amounts only to a civil default and must be distinguished from the crime of fraud.

The specific holding of the above precedent can be found below in the part regarding the level of punishment for the crime of fraud.

The complainants were in a position asserting that the client had no intention of repaying the money from the beginning.

However, in order to establish the fact that the client had actually paid the fuel costs arising in the course of operating the gas station to the business partners and had thereafter also been paying the principal and interest each month, the criminal defense attorney cooperated with the Evidence Investigation Center and submitted account records and the like as evidence.

Along with this, the attorney also explained that, in the course of the gas station's operation actually growing difficult, the client's health also deteriorated, making normal operation of the business difficult.

The attorney secured related materials such as an outpatient treatment confirmation and a confirmation of medical treatment, and established the point that normal operation of the gas station had been difficult after a diagnosis of acute myocardial infarction.

Some of the complainants asserted that all of the sums transferred to the client's account were borrowed funds.

As a result of confirming the transaction records in response, the client had promised to pay a portion of the business proceeds to the counterpart and had actually been paying it, so the relevant amount was understood not as a simple loan but as funds in the nature of an investment.

Accordingly, the attorney actively argued that it was difficult to find the fact that the client had initially deceived the complainants in order to fraudulently obtain money, and that there had not even been any intent to deceive.

The main issue in this case was whether the client, having no intention of repaying the money, deceived the complainants and borrowed the money.

In addition, Supreme Court precedent actually sets out the following elements for its establishment.

In this case the client faced fraud punishment, but by confirming how the funds were actually used and whether the principal and interest were paid, it was judged that there had been no fact of deception by the client.

In this way, when fraud punishment is anticipated, a process of securing related materials in detail and setting out the actual circumstances in a concrete manner is necessary.