"Regret Over Wasted Know-How Accumulated Through Long Investigative Experience"
"Police Strong in Field Due to Abundant Investigative Personnel but Weak in Legal Review"
On the morning of the 9th, police conducted a search and seizure at the Gyeonggi Gwangmyeong LH Gwangmyeong-Siheung Project Headquarters in connection with allegations of speculation involving employees of Korea Land and Housing Corporation (LH) in the 3rd New Town development.
[Asia Economy Reporter Choi Seok-jin] As a government joint special investigation headquarters composed of the police (National Investigation Headquarters), the National Tax Service, and the Financial Services Commission is set to be formed regarding the speculation allegations of Korea Land and Housing Corporation (LH) employees in the 3rd phase new towns, voices are growing that the prosecution, which has expertise in investigating large-scale speculation cases, should participate in the investigation.
In particular, there are concerns that the newly established National Investigation Headquarters may face limitations in overseeing an investigation that could extend its impact to the Prime Minister’s Office or the Blue House, which are in the reporting line of new town development information.
On the 9th, within the prosecution, there were reactions expressing regret over the exclusion of the prosecution from the investigation of this case, which has sparked public outrage.
The prosecution previously achieved results through investigations into speculation in the 1st phase new towns in 1990 and the 2nd phase new towns in 2005. However, due to the enforcement of the amended Prosecutor’s Office Act reflecting the adjustment of investigative authority between the prosecution and police, the prosecution’s investigative authority has been reduced to ‘six major crimes’ starting this year, and under current law, the prosecution has no investigative authority over this case.
A current prosecutor A, who has extensive experience in special investigations such as stock trading using insider information, said, “If the National Tax Service or the Financial Services Commission participate, there will be some degree of fund tracing, but from an investigative perspective, there are indeed limitations,” adding, “Especially in these cases, many special laws that are not usually encountered apply, requiring meticulous legal reasoning and evidence collection to maintain prosecution, and the police may be lacking in that regard.”
This matter primarily falls under the ‘Act on the Prevention of Corruption and the Establishment and Operation of the Anti-Corruption and Civil Rights Commission.’ Article 86 of the law stipulates that a public official who directly acquires or causes a third party to acquire property or financial benefits by using secrets learned during official duties shall be punished by imprisonment of up to seven years or a fine of up to 70 million won, and the property or financial benefits acquired by the person or a third party shall be confiscated or recovered.
Prosecutor B, who has experience investigating real estate speculation cases, said, “In these cases, before tracing funds, it must be identified whose purchase price should be followed, so the investigation should proceed on two tracks: first, tracking the producer and distributor of the business secret, and second, tracing the connection between the buyer on the registry and related persons in the business.”
B said, “First, after the information called ‘new town development plan’ is generated, the process of reporting it to the Ministry of Land, Infrastructure and Transport, the relevant local government, the Prime Minister’s Office, or the Blue House must be examined to confirm through which department and which person it was distributed.” He added, “At the same time, the relationship between the buyer on the registry and the related persons with the information should be clarified through family relations, call records, emails, etc.”
B said, “Especially in cases involving friends or acquaintances rather than family, decisive evidence is often found in text messages or emails exchanged around the time of the real estate purchase that are based on the relevant information,” advising, “Since the issue has recently emerged, it is highly likely that the related parties made calls to manage the situation.”
B expressed concern, saying, “The police have many investigative personnel and are strong in investigating multiple people or sites, but in terms of legal review, they inevitably fall short compared to the prosecution. Especially in these cases, the prosecution must be familiar with precedents regarding the scope of public officials and business secrets subject to the law, and if charges are recognized, the relevant real estate must be compulsorily confiscated, so preservation measures for confiscation must be taken in advance.”
Former senior prosecution official C, who has extensive special investigation experience, said, “The prosecution has accumulated know-how beyond what is seen from the outside because it has long investigated such cases,” adding, “The process of training junior prosecutors is often called ‘apprenticeship style,’ and the know-how accumulated over decades of investigation is passed down through seniors. Prosecutors will regret the current situation where they cannot investigate.”
President Moon Jae-in mentioned the case the day before as “a case requiring organic cooperation between the prosecution and police,” requesting the prosecution to consult with the police, and Minister of Justice Park Beom-gye ordered the designation of prosecutors dedicated to speculation offenders at all prosecution offices nationwide on the 5th.
However, this only emphasized prompt cooperation regarding police search warrants and roles in maintaining prosecution, and the stance remains negative about the prosecution’s participation in the investigation.
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