Supreme Court: Selling an Apartment Under a Borrowed Name Is Not Embezzlement

[Asia Economy Reporter Baek Kyunghwan] The Supreme Court has ruled that a person who lent their name cannot be punished for embezzlement if they sell an apartment without the actual owner's permission. This is because name trust itself is illegal and not protected under embezzlement charges.

On the 18th, the Supreme Court en banc (Presiding Justice Park Sang-ok) upheld the lower court's ruling of "guilty of fraud, not guilty of embezzlement" in the appeal trial of Mr. A, who was charged with fraud and embezzlement.

In December 2013, Mr. A registered the ownership transfer of an apartment owned by Mr. B under his own name at Mr. B's request. However, in August 2015, Mr. A sold the apartment to a third party for 170 million won to repay a debt and also transferred the ownership.

Mr. A, who was tried on charges including embezzlement, was sentenced to two years in prison in the first trial after being found guilty of both embezzlement and fraud involving about 90 million won.

However, in the second trial, the court acquitted him of embezzlement and only recognized the fraud charge, reducing the sentence to one year in prison. The court ruled that since Mr. A only lent his name to Mr. B and registered the ownership transfer, which was invalid under the Real Name Real Estate Act, embezzlement could not be established even if he violated this agreement and sold the apartment.

On this day, the Supreme Court also stated, "The trust relationship between the name trustor and the name trustee cannot be considered a trust worthy of protection under criminal law." Since Mr. A cannot be recognized as a "person who keeps another's property," the subject of embezzlement, the embezzlement charge itself cannot be established. A Supreme Court official said, "It is significant in that it declared that name trusts violating the Real Name Real Estate Act are not protected under criminal law."

This content was produced with the assistance of AI translation services.