Intensified Prosecutor Investigation... What Is the Fate of '50 Billion Club' Members Kwak Sang-do and Park Young-soo's Sons and Daughters?

As the prosecution intensifies its investigation targeting the children of former special prosecutor Park Young-soo and former lawmaker Kwak Sang-do, who are suspected of involvement in the "Daejang-dong 5 Billion Club" scandal, the legal community is closely watching whether meaningful results can be achieved.

Former lawmaker Gwak Sang-do and former special prosecutor Park Young-soo.
Photo by Asia Economy

According to the legal community on the 19th, the Seoul Central District Prosecutors' Office's Anti-Corruption Investigation Division 1 (Chief Prosecutor Eom Hee-jun) and Anti-Corruption Investigation Division 3 (Chief Prosecutor Kang Baek-shin) are analyzing whether the money given to Park’s daughter Su-hyun and Kwak’s son Byung-chae was part of the 5 billion KRW promised by their respective fathers to the Daejang-dong group.

The key issue is to prove with evidence that Park or Kwak received money and special favors for their children as compensation for playing a certain role for the Daejang-dong group. To do this, it must be demonstrated that the money received by the children directly benefited their fathers as well. The court must recognize them as a so-called single "economic community," where benefits to the children simultaneously mean benefits to the fathers.

However, in February, the court ruled that the 5 billion KRW received by Kwak’s son Byung-chae from Hwacheon Daeyu Asset Management as severance pay and bonuses was difficult to view as a bribe for Kwak, which has placed a heavy burden on the prosecution to prove their case. At that time, the Seoul Central District Court stated, "There are circumstances that raise suspicion that Kwak used his son as an agent to receive bribes," but also said, "However, since Kwak Byung-chae is married and maintains an independent livelihood, the benefits he received from Hwacheon Daeyu cannot be evaluated as the same as those received by Kwak," and acquitted Kwak of bribery and mediation charges. The court concluded that Kwak and his son Byung-chae are not a single "economic community."

The legal community is more interested in the investigation targeting Park’s daughter Su-hyun. This is because many analyses suggest that the money Su-hyun received is unlikely to be part of the 5 billion KRW Park promised to the Daejang-dong group. Su-hyun joined Hwacheon Daeyu in June 2016 through Kim Man-bae’s mediation and received an annual salary of 60 million KRW until September 2021. From September 2019 to February 2021, she borrowed 1.1 billion KRW from the company in five installments. Additionally, in June 2021, she purchased an apartment owned by Hwacheon Daeyu at half the market price, gaining a capital gain of 800 million KRW. The prosecution estimates that Su-hyun gained about 2.5 billion KRW in total benefits.

However, the prevailing view in the legal community is that Su-hyun is already economically independent from Park, and the money she received from Hwacheon Daeyu is interpreted as for her personal use. The prosecution also did not include Su-hyun as an accomplice when requesting an arrest warrant for Park. Regarding this, a prosecution official said, "We focused on specifying clearer charges."

Currently, the prosecution is focusing on finding evidence to prove that the 2.5 billion KRW Su-hyun received is related to Park. The day before, prosecutors and investigators visited the residences of Su-hyun and Park’s wife to secure some materials related to the benefits Su-hyun received. Based on the secured materials, the prosecution plans to analyze the scale and nature of the funds Su-hyun received and then consider applying additional charges to Park.

The supplementary investigation targeting Kwak’s son Byung-chae is also accelerating. On the 13th, the prosecution summoned Choi Woo-hyang, a director at Hwacheon Daeyu, as a witness to question the relationship between Kim and Kwak, and the process by which benefits were provided to Byung-chae.

The prosecution believes that when media coverage began in September 2021 regarding Byung-chae’s severance pay, Choi, along with Kim, Kwak, Byung-chae, and Lee Sung-moon, CEO of Hwacheon Daeyu, conspired to label the 5 billion KRW Byung-chae received as a "disease consolation payment." This content was also included in Kwak’s indictment. Earlier in June, the prosecution conducted a search of the National Health Insurance Service to secure evidence proving that Kwak and Byung-chae are an economic community.

This content was produced with the assistance of AI translation services.