Deals & Cases

Criminal Litigation 2020-07-03
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DR & AJU Successfully Leads the Prosecution in a Case in Which an Application for Adjudication and Re-Appeal Had Already Been Dismissed

In this case, a real estate development company (hereinafter “Company A”) and a construction company (hereinafter “Company B”) entered into an agreement where Company A would assist Company B in securing a contract for the construction of a new boarding cram school, and Company B would pay KRW 1.3 billion in the form of contributions and share half of the net profit of the construction with Company A. Once Company B was selected as the contractor, it paid the agreed KRW 1.3 billion to Company A. In this process, Company A and B created a loan certificate of KRW 1.3 billion in the name of Company A to avoid paying taxes and falsely established collateral security of up to KRW 1.5 billion on the real estate owned by Company A with Company B as a creditor. 

However, as a dispute arose between the two companies in the settlement process for the distribution of the net profit of the construction, the representative of Company B (hereinafter “D”) filed a suit against the representative of A (hereinafter “C”) based on the loan certificate that had been falsely created, alleging that C had obtained KRW 1.3 billion from Company B without any intention or ability to repay it. In this case, C was acquitted and subsequently filed a suit against D for false accusations. Meanwhile, Company A filed a suit against Company B, claiming payment of the agreed amount of KRW 1.2 billion, which is a net profit of the construction project that had not been paid by Company B. 

Company B then filed a counterclaim against Company A seeking payment of approximately KRW 1 billion, claiming that the above contribution was actually a loan. 

In the case that C filed a suit against D for false accusation, D was acquitted. C appealed the decision to the prosecution, but the appeal was rejected. C then requested DR & AJU’s Criminal Team to handle the appeal against D. 

Based on the solid trust relationship with our client, DR & AJU’s Criminal Team analyzed all the relevant materials provided by Company A and found that in this tax case related to the construction project, D had prepared and submitted a statement of fact to the tax office stating that KRW 1.3 billion was not a loan and that an employee of Company B had admitted that KRW 1.3 billion was a contribution during a conversation with an employee of Company A. DR & AJU submitted these facts as new evidence and filed a suit against D for false accusation. We also accused D of attempted litigation fraud under the judgment that Company B’s filing a counterclaim claiming KRW 1.3 billion as a loan constituted an attempted litigation fraud. Based on this newly submitted evidence, the prosecution reopened the investigation and charged D with false accusations and attempted fraud. 

In principle, when a request for adjudication is dismissed, the case cannot be publicly arraigned, except where any other important evidence is found later pursuant to Article 262(4) of the Criminal Procedure Act. This case is significant since DR & AJU’s Criminal Team collected important new evidence and led the prosecution based on trust in our client in the case where an application for adjudication and re-appeal had already been dismissed.