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A person walks by a sign board at the prosecution service in this undated file photo. (Yonhap)

South Korea’s public prosecutors filed an indictment Wednesday against Lee Jae-myung, head of the opposition Democratic Party in a major milestone in their primary investigation into alleged kickbacks in a development project in the Daejang neighborhood of Seongnam. While prosecutors had been unable to touch Lee prior to his bid for president, revised testimony by the Daejang project developers ultimately paved the way for his indictment.

Prosecutors’ investigation record reportedly amounts to 500 volumes, with the indictment alone running for 169 pages.

The prosecution service launched its investigation into kickbacks in the Daejang neighborhood development project on Sept. 29, 2021. Yoo Dong-gyu, former chief of strategy for the Seongnam Development Corporation, was taken into custody on Oct. 3. That same month, the prosecutors indicted Yoo for accepting bribes, but not for breach of trust.

Nam Wook, an attorney and the effective owner of Cheonhwa Dongin No. 4, a subsidiary of the Hwacheon Daeyu asset management company involved in the development project in Daejang, was arrested after returning from the US on Oct. 18.

Prosecutors made rapid progress on their investigation. On Nov. 1, they convinced a court to issue a detention warrant for Kim Man-bae, majority shareholder in Hwacheon Daeyu, on the charges of breach of trust, after failing to do so the previous month. The court’s rejection of the earlier warrant request had prompted accusations that there wasn’t substance to the criminal charges against Kim.

Nam Wook and others were detained along with Kim.

As the investigation progressed, two of Yoo Dong-gyu’s close associates who were involved in selecting developers for the Daejang neighborhood — Yoo Han-gi, former director of the Seongnam Development Corporation’s development division, and Kim Moon-ki, former deputy director of development — were both found dead, Yoo on Dec. 10 and Kim on Dec. 21.

Other deaths followed. An individual surnamed Lee (no relation to the Democratic Party head) who had raised allegations about developers covering Lee Jae-myung’s legal fees died of illness in January 2022, while an individual surnamed Chun who had served as Lee’s first chief of staff during his tenure as governor of Gyeonggi Province took his life in March 2023.

Next, the prosecutors embarked on an investigation of the “5 billion won club,” a group of people suspected of having received 5 billion won from Hwacheon Daeyu.

On Nov. 17, 2021, the prosecutors raided the residence of former People Power Party lawmaker Kwak Sang-do, alleging that he’d received 5 billion won (2.5 billion won after taxes) in the guise of a severance payment to his son following his resignation from a position at Hwacheon Daeyu.

Next, the prosecutors looked into former special prosecutor Park Young-soo and former Money Today Chairman Hong Seon-geun, both of whose names came up in a recording made by accountant Jeong Young-hak. Former Supreme Court Justice Kwon Sun-il also came under scrutiny over allegations that he’d cut deals for favorable decisions in the courts.

While Kwak Sang-do was detained and charged with accepting a bribe, he was acquitted by the court in February. Aside from Kwak, the investigation into the “5 billion won club” hasn’t gotten very far over the past year and a half.

In the meantime, a new administration had come to power. Yoon Suk-yeol was inaugurated as president on May 10, 2022, and Han Dong-hoon was appointed Minister of Justice a week later. A new team was assembled to investigate the Daejang neighborhood scandal under the lead of Song Gyeong-ho, head of the Seoul Central District Prosecutors’ Office, and Go Hyeong-gon, fourth deputy chief prosecutor, both of whom are counted among Yoon’s loyal followers.

The new team rebooted the investigation with their sights on Lee Jae-myung. Last October, Kim Yong, a close associate of Lee and former vice president of the Democratic Party think tank Institute for Democracy, was arrested for allegedly violating the Political Funds Act. The next month, the prosecutors detained and indicted not only Kim but also Jeong Jin-sang, another of Lee’s lieutenants who was heading up the political affairs coordination office at Lee’s secretariat.

Following his release from jail, Nam Wook, the attorney, sang a different song, testifying that the funds in Cheonhwa Dongin No. 1 were earmarked for Lee Jae-myung’s retirement. Nam, Yoo Dong-gyu and other Daejang neighborhood developers released a torrent of comments that were unfavorable for Lee.

The revised testimony gave credence to the theory that Lee was set up to receive the 42.8 billion won worth of shares in Cheonhwa Dongin No. 1.

Now that Lee’s aides were in custody and facing charges, the prosecutors made their move against Lee this year, asking the National Assembly to strip Lee of his legal immunity as a lawmaker on Feb. 16 so that they could request a detention warrant. The National Assembly narrowly voted down that request on Feb. 27.

About a month later, on March 22, the prosecutors finally indicted Lee on charges of breach of trust without seeking his detention. Lee’s indictment came a year and a half after prosecutors’ launched their investigation.

By Jeon Gwang-joon, staff reporter

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