Kwak Sangdo’s Son, Acquitted in “5 Billion Won Severance” Case... Court Orders Account Freeze Lifted

Appeal on Asset Preservation Accepted After Four Years

Court Cites First Trial Acquittal and Dismissal of Indictment

Prosecutors File Further Appeal to the Supreme Court

A court has ruled to lift the freeze on the financial accounts of Byungchae Kwak, son of former People Power Party lawmaker Sangdo Kwak, who was tried over the so-called “5 billion won severance pay scandal” but acquitted in the first trial.

Former Congressman Sangdo Kwak is smiling as he speaks after the first trial sentence at the Seoul Central District Court in Seocho-gu, Seoul, on February 6. Photo by Yonhap News

According to the legal community on March 9, the Criminal Appellate Division 2-1 of the Seoul Central District Court (Presiding Judges: Kwak Jeonghan, Kang Heeseok, Jo Euna) accepted the appeal filed by former lawmaker Kwak against the order to preserve assets for potential forfeiture on February 9. The assets subject to release are financial institution accounts in Byungchae Kwak’s name.

Asset preservation for forfeiture is a procedure to freeze assets suspected of being criminal proceeds until a final verdict is reached, preventing their disposal in anticipation of possible confiscation or forfeiture in future trials. In principle, criminal proceeds are subject to confiscation, and if confiscation is difficult due to prior consumption or disposal, the equivalent amount is collected. To enable this, asset preservation for forfeiture is used to preemptively freeze the relevant property.

Previously, during its investigation into former lawmaker Kwak’s “5 billion won severance pay” allegations, the prosecution sought an asset preservation order on portions of former lawmaker Kwak and Byungchae Kwak’s assets in October 2021, which the court granted. The Kwak side appealed the decision in November of the same year. The court has now accepted this appeal nearly four years later.

The appellate court found that, considering the first trial’s dismissal of charges against former lawmaker Kwak and the acquittal of Byungchae Kwak, the necessity for asset preservation for forfeiture was not sufficiently established. The court stated, “It has been over four years since the order for asset preservation was issued, yet there is no evidence justifying the disadvantages suffered by the defendant. At present, there is insufficient basis for the necessity of asset preservation for forfeiture.”

The prosecution has appealed this court decision to the Supreme Court.

Former lawmaker Kwak was indicted on bribery charges over the process by which his son received 5 billion won in severance and bonus payments upon leaving the company owned by Kim Manbae, major shareholder of Hwacheon Daeyu, but was acquitted in the first trial.

Subsequently, the prosecution additionally indicted Byungchae Kwak on bribery charges and charged former lawmaker Kwak with violating the Act on Regulation and Punishment of Concealment of Criminal Proceeds. However, last month, the court found both not guilty and dismissed the indictments, respectively. The court determined that the prosecution’s additional indictment constituted an abuse of prosecutorial power aimed at overturning the previous not guilty verdict.

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