Prosecutors Calculate Lee Baekhyun-dong's Embezzlement Amount... "At Least 20 Billion, Up to 300 Billion"

Attention is focused on the specific amount of embezzlement calculated by the prosecution after summoning Lee Jae-myung, leader of the Democratic Party of Korea, who has been pointed out as the pinnacle of the 'Baekhyeon-dong development special favor' suspicion, and investigating him for over 13 hours. The scale of the embezzlement amount serves as a measure to gauge the seriousness of the charges against Lee, potentially influencing not only the prosecution's decision to request an arrest warrant but also the court's decision during the warrant review.

Lee Jae-myung, the leader of the Democratic Party of Korea, who is under suspicion of preferential treatment in the development of Baekhyeon-dong, is appearing at the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul on the 17th for investigation. Photo by Kang Jin-hyung aymsdream@

According to the legal community on the 18th, the Anti-Corruption Investigation Division 1 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Eom Hee-jun) investigated Lee as a suspect related to the Baekhyeon-dong allegations from around 10:40 a.m. to 9 p.m. the previous day. From 9 p.m., Lee reviewed the investigation records for three hours. The prosecution judged that it would be difficult to publicly summon the leader of the main opposition party again, so they conducted the investigation as quickly as possible the day before. A prosecution official said, "We conducted the investigation efficiently and have somewhat completed it."

Now, the prosecution plans to finalize the embezzlement amount based on Lee's statements and previous investigation details. A prosecution official stated, "The embezzlement amount will be based on the intentional forfeiture of profits that Seongnam City should have received due to Seongnam Urban Development Corporation not participating," adding, "We plan to verify through investigation any additional calculable parts."

The embezzlement amount refers to the loss incurred by Seongnam City, which did not participate in the Baekhyeon-dong apartment development project due to Lee's final approval. The legal community expects the embezzlement amount to be estimated between 20 billion KRW and 300 billion KRW. Based on the profit-sharing method initially discussed when Seongnam Urban Development Corporation considered participating as the project operator, 20 billion KRW is the most likely figure. According to the Board of Audit and Inspection's investigation report released in July last year, during the project process, the corporation was discussed to receive 20 billion KRW as a fixed fee under the project management (PM) service contract or to share profits of 31.4 billion KRW (based on the 2021 audit report) through a 10% equity stake. If the private contractors monopolized the project due to the corporation's non-participation and the actual profits they took are considered the profits the corporation should have earned, the embezzlement amount could increase up to 300 billion KRW. Seongnam R&D PFV, which participated as the project operator, earned 300 billion KRW in sales profits at the time, and its largest shareholder, Asia Developer, received about 70 billion KRW as dividend income.

Adding the embezzlement amount from the Daejang-dong development corruption case, the total damage Lee caused to Seongnam City during his tenure as mayor approaches 800 billion KRW. Earlier, when prosecuting Lee for the Daejang-dong case, the prosecution calculated the embezzlement amount at 48.95 billion KRW. If the Daejang-dong project had proceeded normally, the corporation would have secured 67.25 billion KRW, which is 70% of the total profit of about 96 billion KRW, but Lee is judged to have caused a loss of 48.95 billion KRW by removing clauses such as the 'excess profit recovery clause.' The 80 billion KRW figure is a sum frequently appearing in embezzlement cases involving corporate heads and is considered very unusual for the scale of embezzlement by a local government head.

If Lee is brought to trial over the 'Baekhyeon-dong suspicion,' it is expected that the prosecution and Lee will engage in a sharp dispute over the scale of the embezzlement. Lee's side completely denies the embezzlement charges related to this case. After finishing the prosecution's investigation at 12:01 a.m. that day and leaving the Seoul Central District Prosecutors' Office building, he said, "I told you that the Korea Food Research Institute, which sold the land on the condition of a change of use but contracted at the pre-change price, and the Ministry of Land, Infrastructure and Transport, which approved it, are the real parties guilty of embezzlement."

Following the Daejang-dong and Baekhyeon-dong cases, the prosecution is also investigating the 'Jeongja-dong hotel development special favor' suspicion, so the amount of damage (embezzlement amount) Lee caused to Seongnam City during his tenure as mayor may increase further. The Jeongja-dong suspicion involves Vegitz Comprehensive Development receiving various benefits from Seongnam City, such as land-use changes and rent reductions, while building a tourist hotel on city-owned land in Jeongja-dong, Bundang-gu, Seongnam City in 2015. The Criminal Division 3 of the Suwon District Prosecutors' Office Seongnam Branch (Chief Prosecutor Yoo Min-jong), which previously investigated Lee's 'Seongnam FC illegal sponsorship fund' case, is uncovering the truth of this case.

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