[According to the Law of Expediency] 66. Embezzlement in the Course of Business: The Dangerous Boundary Between 'Company Money' and 'My Money'

*This content was translated by AI.

Embezzlement by corporate executives, misappropriation of funds by entertainment agencies, and even fan club membership fee issues—now the term "embezzlement" is no longer unfamiliar on entertainment pages beyond economic sections.

What is interesting is that many of these cases do not begin with a plan to "steal." They often start with thoughts like, "I'll just use it for a moment and pay it back," or "After all, I'm going to receive this money anyway." Embezzlement in the course of business typically arises at the borderline of such careless judgments.

Embezzlement in the course of business under Article 356 of the Criminal Code is a serious offense punishable by imprisonment for up to 10 years or a fine of up to 30 million won. If the illicit amount exceeds 5 billion won, the Special Act on Aggravated Punishment for Specific Economic Crimes applies, leading to a sentence of at least three years; if it exceeds 5 billion won, life imprisonment is possible. However, examining court rulings reveals that the dividing line between guilty and not guilty lies not in the amount involved but in "intent of illegal possession"—that is, whether one attempted to dispose of another's property as if it were their own.

The Supreme Court has ruled that for funds with broad discretion, such as office expenses or business promotion costs, embezzlement cannot be recognized solely on the grounds that the recipient failed to explain how the money was used; instead, personal use or excessive spending must be proven (Supreme Court 2011Do524). In lower court cases, employees who transferred small amounts from collection accounts and later restored the balances were acquitted because the account usage was not strictly limited and there were no explicit guidelines. Similarly, a case where partnership funds were withdrawn but could reasonably be viewed as repayment of an existing loan receivable also resulted in acquittal.

In contrast, cases resulting in convictions are clear: managers who transferred corporate account funds for personal living expenses, treasurers who used 90 million won from clan funds for private business ventures, and cooperative heads who paid their own criminal defense attorney fees with cooperative money—all failed to avoid guilty verdicts. This is because evidence showed that the flow of money had moved away from organizational purposes toward individual pockets.

These precedents offer two key lessons to us.

First, for those managing organizations: "the power of regulations." Clearly documenting the scope of use for corporate cards and business promotion funds, approval procedures, and settlement deadlines can prevent a significant number of disputes and misunderstandings.

Second, for those handling funds: "the power of records." Documentation such as board resolutions, settlement agreements, and repayment details becomes almost the only means to prove one's innocence in the future.

Money issues are fundamentally about trust. And in criminal courtrooms, trust is proven not by words but by documents. If there is concern that the boundary between "company money" and "my money" may become blurred, that is precisely the moment when records must be kept and procedures followed. Carelessness leading to courtroom proceedings is closer than we think.

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*This content was translated by AI.