Daejang-dong Scandal: Key Figure Indicted for Embezzlement, Allegations of Laundering Surface
Seoul, South Korea – Prosecutors in Seoul have indicted a key figure in the sprawling Daejang-dong development scandal without detention, accusing them of embezzling approximately 12.1 billion Korean won (roughly $9 million USD) in criminal proceeds. The individual, identified only by their surname Bae, is the de facto owner of Cheonhwa Dongin 7, a company implicated in the controversial land development project.
The indictment, announced by the Seoul Central District Prosecutors’ Office Anti-Corruption Investigation Division 3, alleges that Bae invested a nominal sum of 10 million Korean won (approximately $7,500 USD) through Cheonhwa Dongin 7 into the Daejang-dong project. Despite this minimal investment, Bae reportedly reaped substantial dividends totaling 12.13 billion Korean won (around $9.1 million USD).
Further fueling public scrutiny, reports indicate that Bae allegedly utilized a significant portion of these funds to acquire a two-story building in Gijang County, Busan. This property, which houses a Starbucks outlet, was reportedly purchased for a staggering 7.45 billion Korean won (approximately $5.6 million USD). The vast discrepancy between Bae’s initial investment and the subsequent windfall has intensified investigations into alleged illicit financial activities surrounding the Daejang-dong development.
Bae’s background also raises questions. Prior to his alleged involvement in the Daejang-dong scandal, Bae was reportedly a reporter for a news channel before transitioning to an economic media outlet associated with Kim Man-bae, a prominent shareholder in Hwacheon Daeyu, another company at the heart of the controversy. Significantly, Bae is also understood to have facilitated introductions between Kim and other individuals central to the Daejang-dong scandal, including lawyer Nam Wook and accountant Jeong Young-hak.
The prosecution has stated its intention to actively counter legal challenges posed by private developers involved in the Daejang-dong project. These developers are reportedly seeking to overturn provisional seizure and collection preservation measures. In response, the prosecution plans to submit relevant documentation pertaining to Kim’s involvement to the court.
This development follows a November ruling where Kim and other private developers were found guilty by the court. They were collectively ordered to pay a surcharge amounting to approximately 42.8 billion Korean won (around $32 million USD). However, the prosecution’s decision not to appeal this ruling effectively capped the total surcharge at this figure. Subsequently, Kim, along with lawyer Nam and others, petitioned the court to lift the provisional seizure and collection preservation measures that had been previously granted at the prosecution’s request.
In a separate but related development, the Seoul Central District Prosecutors’ Office Anti-Corruption Investigation Division 1 has decided not to indict Kim’s brother and sister. They had been under suspicion for allegedly concealing undeclared checks and assets valued at 1.9 billion Korean won (approximately $1.4 million USD) received from Kim. It was noted that Kim’s sister had purchased a standalone house in Yeonhui-dong, Seoul, from Yoon Ki-jung, the father of former President Yoon Suk-yeol, for 1.9 billion Korean won in April 2019. Nevertheless, the prosecution concluded that there was insufficient evidence to definitively prove that the siblings had concealed criminal proceeds, rendering criminal charges inapplicable in their case.
Key Allegations and Developments:
- Embezzlement Charges: Bae, linked to Cheonhwa Dongin 7, faces charges of embezzling 12.1 billion Korean won in criminal proceeds from the Daejang-dong development.
- Suspicious Property Acquisition: Allegations suggest a portion of the embezzled funds was used to purchase a commercial building for 7.45 billion Korean won.
- Professional Background: Bae’s past as a journalist and his alleged connections to key figures in the scandal are under scrutiny.
- Legal Maneuvers: Prosecutors are preparing to contest legal challenges aimed at lifting asset preservation measures related to the Daejang-dong case.
- Previous Verdicts: Kim and other private developers were found guilty and ordered to pay a substantial surcharge, a decision the prosecution has not appealed.
- Family Members Cleared: Kim’s brother and sister will not face charges despite suspicions of concealing assets.
