'5 Billion Club Suspicion' Kwak Sang-do Appears at Prosecutors' Office: "Supporting My Son Once or Twice Does Not Make Us an Economic Community"

Former People Power Party lawmaker Kwak Sang-do, suspected to be one of the key figures in the '5 Billion Won Club' scandal, appeared at the prosecution on the 25th.

The Anti-Corruption Investigation Division 1 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kang Baek-shin) summoned former lawmaker Kwak at 10 a.m. that day to investigate him as a suspect on charges of violating the Act on the Regulation of Concealment of Criminal Proceeds. The prosecution is reportedly questioning Kwak about his economic relationship with his son Byung-chae and the nature of the money his son received from Hwacheon Daeyu Asset Management as severance pay.

Former People Power Party lawmaker Kwak Sang-do, under investigation for allegations related to the "5 Billion Club," is responding to reporters' questions as he enters the Seoul Central District Prosecutors' Office in Seocho-dong, Seoul, on the morning of the 25th for questioning as a suspect. It has been about eight months since the first trial court ruled Kwak not guilty of major charges including bribery and solicitation on February 1.
[Image source=Yonhap News]

Former lawmaker Kwak arrived at the prosecution office around 9:51 a.m. and denied the allegations again when asked by reporters if he ever exerted influence over Hana Bank, saying, "The prosecution has been investigating for two years, but there is no material related to me. I am not involved."

Regarding the reason his son Byung-chae posted bail, he stated, "I was detained, and my wife passed away, so there was no family at home," adding, "I repaid it immediately after being released." He also denied allegations that he used his wife's card or received support for the jeonse deposit even after his son was employed, questioning, "The prosecution calls my son and me an economic community, but providing support once or twice does not make us an economic community, does it?"

He is accused of receiving a bribe of 5 billion won (2.5 billion won after tax) through his son Byung-chae, who worked at Hwacheon Daeyu Asset Management, under the pretext of severance pay. The prosecution believes that in 2015, when the Seongnam E-Park consortium led by major shareholder Kim Man-bae and others faced a crisis due to Hana Bank's withdrawal moves, former lawmaker Kwak played a special role and received this money as compensation. It is alleged that he exerted influence over Hana Bank to prevent the consortium's withdrawal and then pocketed 5 billion won through his son Byung-chae.

In February last year, the prosecution arrested and indicted former lawmaker Kwak on charges of mediation under the Act on the Aggravated Punishment of Specific Economic Crimes and bribery under the same act. However, the first trial court ruled that it was difficult to conclude that there was a crisis of Hana Bank's consortium withdrawal and that Kwak actually exerted influence over Hana Financial Group, acquitting him of the mediation charge.

Regarding the bribery charge, the court judged that although the 5 billion won severance pay was excessive by social standards, the evidence did not prove that Kwak directly received it, resulting in an acquittal.

The prosecution appealed the first trial verdict, subsequently registering Byung-chae as an accomplice in bribery and adding charges of violating the Act on the Regulation of Concealment of Criminal Proceeds against the father and son Kwak, conducting supplementary investigations.

During this process, the prosecution reportedly uncovered new circumstances, including that about 30 million won in graduate school tuition for Byung-chae was paid from an account under Kwak's name and that 20 million won was also provided to support Byung-chae's jeonse deposit.