Supreme Court: "Direct Examination Required to Overturn Lower Court Acquittal"... Fraud Appeal Sent Back for Retrial

Indicted for fraud after receiving 133 million won from a college classmate as 'investment'

Acquitted in the first trial... Convicted in appeals without additional investigation

Supreme Court: "Overturning first-instance ruling without direct examination is unlawful"

The Supreme Court has ruled that, if an appellate court wishes to overturn a lower court's acquittal in a case where the first-instance court found a witness's testimony unreliable, it must conduct additional evidentiary proceedings, such as recalling the witness for direct examination.

According to the legal community on June 22, the Supreme Court (presiding justice Seo Kyunghwan) recently overturned the conviction handed down in the appeal trial of Mr. Kim, who was indicted on fraud charges, and remanded the case to Suwon District Court for retrial.

Mr. Kim was indicted on charges of defrauding a college classmate, the victim, by promising in 2016 to help them join a private equity fund with guaranteed principal and fixed interest rates, and subsequently receiving a total of 133 million won over eight transactions. At the time, Mr. Kim had personal debts of 200 million won, and it was found that he intended to use the money for living expenses rather than for investing in a private equity fund, as he neither had the intention nor the ability to do so.

The first-instance court acquitted Mr. Kim, pointing out that the victim had sent money on eight occasions over four years without requesting any certificate or contract for the private equity fund subscription, and that the investment funds were transferred to Mr. Kim's personal account rather than a corporate account. In particular, the court questioned the credibility of the victim's claim of fraud, noting that it was unreasonable for someone with prior legitimate investment experience to hand over such large sums in this manner.

In contrast, the appellate court reversed the acquittal based on the same evidence, such as KakaoTalk chat records, and sentenced Mr. Kim to one year in prison, suspended for two years. The appellate panel found that the victim's testimony was consistent and that Mr. Kim had paid money under the pretense of 'returns' based on a fixed interest rate each month, thereby acknowledging the fraudulent conduct.

However, the Supreme Court found that the appellate proceedings were procedurally improper. The justices emphasized, "If the first-instance court rejected the credibility of testimony after directly observing the witness's demeanor and attitude, the appellate court can only overturn this finding if there are compelling and clear circumstances that render the lower court's assessment unacceptable."

The ruling continued, "Even if the appellate court had doubts about the first-instance decision, it should not have immediately overturned the verdict. Instead, it should have conducted additional evidentiary proceedings, such as re-examining the victim as a witness, and exercised caution in its judgment. Recognizing the defendant's guilt based solely on a single trial session without any further evidence gathering constitutes a misunderstanding of the principles of trial-centered and direct examination, as well as the legal framework governing appellate review, and this error affected the judgment."

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