[Decision] Renbel Capital Coin Fraud Recruiter Case Overturned and Remanded for Conviction

“Implied Intent Can Be Recognized”

The Supreme Court has overturned the acquittal of Mr. A, a recruiter for “Renbel Capital,” who was suspected of involvement in a digital asset investment fraud. While the lower courts in both the first and second trials did not recognize fraud charges against Mr. A, citing the possibility that he too was a victim deceived by higher-level operators, the Supreme Court focused on the fact that Mr. A managed around 50 subordinate investors and was aware of the so-called “Ponzi scheme” method. The Court judged that “there is sufficient room to conclude that he at least implicitly deceived the victims and misappropriated their investment funds.” On November 6, the Supreme Court’s Criminal Division 1 (Presiding Justice Shin Sookhee) overturned the previous ruling that found Mr. A not guilty of fraud and remanded the case to the Daejeon District Court (2024Do6215).

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[Facts]

In January 2019, Mr. A told the victim, “If you invest in Renbel Capital, your principal and interest will be guaranteed. When the company is listed, you will receive tokens that can be used in daily life, and you will receive a commission if you introduce other investors.” The victim transferred 24.3 million won and 21.77 million won to Mr. A through a bank account in his son’s name. However, Renbel Capital operated without any profit-generating structure, paying returns to existing investors using new investors’ funds-a so-called Ponzi scheme.

In August 2022, prosecutors indicted Mr. A on fraud charges. During the trial, Mr. A’s side argued, “I trusted the words of the higher-level operators and simply conveyed their statements. There was no intent to deceive the victim or to misappropriate funds.”

[Lower Court Rulings]

The court of first instance acquitted Mr. A. The first trial panel stated, “It is difficult to conclude beyond reasonable doubt that Mr. A deceived the victim and received investment funds while knowing that Renbel Capital was unable to pay back the principal or returns.” The court further noted, “Mr. A himself invested based on trust in the statements of the top-level operators and Renbel Capital’s promotional materials, but suffered losses after being unable to withdraw Bitcoin since February 2019. Mr. A appears to have been merely a recruiter receiving commissions for attracting investments and was not in a position to be involved in the operation or profit distribution of Renbel Capital.” The appellate court upheld the first instance verdict.

[Supreme Court Ruling]

The Supreme Court overturned and remanded the case, stating that the lower courts misunderstood the legal principles regarding fraudulent acts and the intent to misappropriate funds, and failed to conduct the necessary examination. The Supreme Court ruled, “Considering that Mr. A invested in Renbel Capital in March 2018, managed around 50 subordinate investors, and operated funds using a Ponzi scheme, as well as the fact that the Renbel Capital website ceased operations in December 2018, there is sufficient room to conclude that Mr. A at least implicitly recognized the impossibility of returning the principal and paying high returns, yet deceived the victims and misappropriated their investment funds.”

Lee Sangwoo, Legal Times Reporter

※This article is based on content supplied by Law Times.