[Seocho-dong Legal Talk] The Light and Shadow of the Prosecution Unraveling 'Lee Jae-myung Allegations' Through Close Associate Investigation

[Asia Economy Reporter Kim Hyung-min] The prosecution investigation has reached the point of summoning Lee Jae-myung, the leader of the Democratic Party of Korea, for questioning. July of last year is identified as a turning point. With the prosecution personnel changes, members of each investigation team were replaced. Since then, the prosecution has accelerated investigations into suspicions involving Lee and has made progress.

The legal community is particularly focusing on the 'investigation of close associates.' The prosecution has cleverly delved into Lee's close associates and even their close associates. A lawyer in Seocho-dong said, "Historically, the prosecution has a characteristic of conducting intense investigations around the subject with the determination to 'eradicate corruption crimes to the root.' This case should be viewed the same way." There is an evaluation that progress is being made. Of course, there are also criticisms. Investigations of close associates sometimes cause unfortunate incidents that endanger someone's life. At such times, the prosecution cannot escape criticism of conducting "coercive investigations." This was also the case in investigations related to Lee.

Lee Jae-myung, leader of the Democratic Party of Korea, is speaking as he appears at the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul on the 28th to undergo prosecution investigation related to the Daejang-dong development preferential treatment allegations. Lee is suspected of leaking internal secrets of Seongnam City or Seongnam Urban Development Corporation to private developers as the final decision-maker of the Wirye and Daejang-dong development projects during his tenure as mayor of Seongnam, enabling them to gain enormous profits. Photo by Kim Hyun-min kimhyun81@

Did Psychological Pressure Through Close Associates Work... From Confession to Voluntary Return

When investigating the Wirye and Daejang-dong development corruption, lawyer fee payments, and the Ssangbangwool Group's illicit funds related to North Korea remittances, the prosecution followed key figures close to Lee to unravel the issues. At this time, the 'Daejang-dong group' made explosive statements, and former Ssangbangwool Group chairman Kim Seong-tae, who had been living in hiding overseas, voluntarily returned to Korea.

Kim's return process is particularly noteworthy. Although he was arrested at a golf course in Pathum Thani, Thailand, he decided to return voluntarily. Considering that Kim had been living a luxurious fugitive life for the past eight months, seemingly mocking the investigation authorities, this was unexpected. It is reported that he felt severe guilt as many of his family members, relatives, and acquaintances came under prosecution investigation, were detained, or brought to trial.

There is also talk that the dispatch of Cho Ju-yeon, head of the International Cooperation Division at the Supreme Prosecutors' Office (chief prosecutor), to the Suwon District Prosecutors' Office was a 'masterstroke.' He is an expert in extradition and criminal justice cooperation. In September last year, he was assigned a special mission to arrest Kim and others and worked at the Suwon District Prosecutors' Office. At that time, although the Suwon District Prosecutors' Office obtained an arrest warrant for Kim, requested a red notice from Interpol, and invalidated his passport, they could not find any trace of Kim. With the support of Chief Prosecutor Cho, they found a breakthrough.

The successive explosive statements by former Seongnam Urban Development Corporation Planning Director Yoo Dong-gyu and lawyer Nam Wook, the so-called 'Daejang-dong group,' are also seen as results of the close associate investigations. Yoo and Nam have recently attracted great attention by revealing the inside story of how the project's profits were distributed during the Daejang-dong trial and prosecution investigation. It is known that as the prosecution began investigating acquaintances around them with relationships closer than family, their mindset began to change. Observing Lee's words and actions related to the case, they even expressed feeling "betrayed."

Former chairman Kim Seong-tae, the real owner of Ssangbangwool Group, who was arrested in Thailand during his overseas fugitive life, is being escorted through Incheon International Airport on the morning of the 17th. Photo by Kang Jin-hyung aymsdream@

Kim Man-bae Could Not Endure Pressure and Attempted Extreme Choice

The investigation of close associates also had adverse effects. Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management, attempted an extreme choice on the afternoon of December 14 last year inside his car on a road in Suwon, Gyeonggi Province. It is known that Kim was greatly shocked by the prosecution's arrest of his close associate Lee Han-sung, who served as co-CEO of Hwacheon Daeyu, and the search and seizure of the law firm Taepyungyang's office the day before. He reportedly said to those around him, "Many people are suffering because of me."

Since many people involved in suspicions related to Lee had previously passed away, Kim's choice shocked the public even more. A legal community official said, "In cases involving multiple people, those involved may feel significant pressure as their conduct can immediately affect others." He added, "This tendency is stronger among those who have risked everything to participate in the case."

Major shareholder of Hwacheon Daeyu, Kim Man-bae [Photo by Yonhap News]

On the other hand, there is also analysis that cutting off the money flow had a considerable impact. The prosecution investigated key figures related to each suspicion involving Lee, traced the flow of funds, identified illegal profits, and froze them. In the case of Kim and the Daejang-dong group, a total of 444.6 billion KRW earned through the urban development project was frozen. The prosecution filed pre-indictment seizure and preservation requests with the Seoul Central District Court for Kim, lawyer Nam, and Jung Young-hak, which were approved. The Suwon District Prosecutors' Office also filed seizure and preservation requests with the court for assets held under aliases by former chairman Kim, including 20 million shares (worth about 24.5 billion KRW) of Ssangbangwool affiliate Nanos, which were approved.

Close associate investigations and tracking of criminal proceeds. As the prosecution approaches the final stages of clarifying the case, it seems they will focus even more on these two aspects. This is especially so as the atmosphere is shifting depending on the testimonies of close associates and related persons regarding most suspicions involving Lee. Kim Yong, former deputy director of the Democratic Research Institute, and Jeong Jin-sang, former chief political coordinator of the party leader's office, who are said to be closest to Lee, continue to deny the allegations. Kim Man-bae also maintains the same position. Whether the prosecution can obtain testimonies related to Lee from them is expected to be the key to future investigations and trials.