‘50 Billion Won Club’ member Kwak Sang-do has indictment dismissed in first trial...“Prosecutors abused their authority to indict”

[Financial News] In connection with the alleged preferential treatment in the Daejang-dong development project, former People Power Party lawmaker Kwak Sang-do, who was put on trial for allegedly receiving tens of billions of won from Hwacheon Daeyu Asset Management (Hwacheon Daeyu) in the form of his son’s severance pay and concealing it, had his indictment dismissed in the first-instance ruling.
Criminal Division 23 of the Seoul Central District Court, presided over by Judge Oh Se-yong, on the 6th acquitted Kwak’s son on charges including bribery under the Act on the Aggravated Punishment of Specific Crimes and violating the Act on Regulation and Punishment of Criminal Proceeds Concealment. Former lawmaker Kwak, who was charged with receiving brokered bribes under the same act and violating the Political Funds Act, had his indictment dismissed. Prosecutors had previously sought a four-year prison term for Kwak and nine years for his son.
The court first found that prosecutors had abused their authority to indict. It held that prosecutors effectively filed a new case to overturn a prior acquittal. The court stated, “Instead of pursuing an appeal in the earlier case, the prosecutor chose to file this new indictment, thereby obtaining what is in substance two first-instance rulings on the same defendant, with the apparent intention of overturning the previous not-guilty verdict, and in doing so exercised prosecutorial discretion arbitrarily.” It added, “Former lawmaker Kwak can be seen as having suffered a substantial disadvantage by effectively being subjected to two first-instance judgments on essentially the same facts.”
Regarding the allegation that Kwak received 100 million won from attorney Nam Wook, the court found 50 million won to be a bribe and the remaining 50 million won not guilty. Even though the elements of brokered bribery under the Act on the Aggravated Punishment of Specific Crimes and a violation of the Political Funds Act by Kwak were deemed to have been met, the court concluded that all such charges must be dismissed because the indictment itself resulted from prosecutorial abuse of authority.
All charges against Kwak’s son were also found not guilty. For bribery under the Act on the Aggravated Punishment of Specific Crimes to be established, a conspiracy must be proven. The court determined it was difficult to conclude that there was any explicit or implicit agreement that he would receive 5 billion won in connection with his father Kwak’s official duties. The court further noted that it was also hard to see the father and son as having conspired to receive bribes.
Because the bribery charge was not established, the alleged violation of the Act on Regulation and Punishment of Criminal Proceeds Concealment also could not stand.
Meanwhile, Kim Man-bae, the major shareholder of Hwacheon Daeyu, who was tried alongside them, was fined 5 million won. He was acquitted of brokered bribery under the Act on the Aggravated Punishment of Specific Crimes together with Kwak, but was found guilty of violating the Political Funds Act. The court held that the donations Kim provided to Kwak were funds related to Hwacheon Daeyu, and therefore constituted illegal political funds.
Kwak was indicted on charges of conspiring with Kim and receiving 100 million won from attorney Nam, one of the private developers involved in the Daejang-dong project, in 2016. His son was charged with conspiring with his father to receive 5 billion won (25 billion won after tax deductions) in severance and other payments from Hwacheon Daeyu as a bribe when he left the company.
In April 2021, Kwak was indicted on allegations that, during the Daejang-dong project, he received about 2.5 billion won from Kim as a bribe in return for arranging that the Hana Bank consortium would not withdraw, and in connection with his duties as a member of the National Assembly, disguising and concealing the money as his son’s severance and performance bonuses. After Kwak was acquitted in the first-instance ruling in February 2023, prosecutors additionally indicted his son in October of the same year, charging him alongside his father.
theknight@fnnews.com Jung Kyung-soo Reporter