Defending an appellate acquittal in an occupational embezzlement case arising from the sale of a building in a joint real estate investment

During a joint real estate investment project, a shortage of funds and unpaid construction costs led to the start of compulsory auction proceedings against the building, and one of the co-venturers sold the building and land to a third party.

Another co-venturer filed a criminal complaint for occupational embezzlement, claiming that he had suffered losses because the property was sold below market value without his consent.

The defendant was acquitted on appeal, but the prosecution appealed to the Supreme Court, and Attorney Jaehoon Lee represented the defendant before the Supreme Court of Korea, arguing that the acquittal was correct.

The key issues were whether disposing of the joint investment property amounted to occupational embezzlement, and whether an intent of unlawful appropriation could be found in light of the property's actual value and the circumstances of the sale.

In particular, the questions were whether the appraised value set in the auction proceedings could serve as the benchmark for the actual sale price, and whether, considering the restrictions on changing the building's permitted use, the additional construction costs, and the risk of loss from the compulsory auction, the sale was a reasonable step to prevent losses to the co-venturers.

Attorney Lee analyzed the history of the joint investment project, the funding situation, the unpaid construction costs, and how the compulsory auction came to be started, and argued that the sale of the property was unavoidable.

In particular, he reviewed the permit requirements and fire safety standards that would apply to a change in the building's use and the additional construction costs, and explained specifically why the appraised value and the actual sale price differed.

He also analyzed the results of the buyer's witness examination, the construction contracts, accounting records, and auction cases involving nearby properties to support the reasonableness of the sale price, and argued that had the property not been sold, the co-venturers' losses could instead have grown.

On that basis, he argued before the Supreme Court that the appellate court's finding that the defendant's sale did not involve an intent of unlawful appropriation, and its acquittal, should be upheld.

The defendant was acquitted of occupational embezzlement on appeal. We then responded to the prosecution's appeal to the Supreme Court, and the Supreme Court's final decision is yet to be confirmed.