Court Sentences Former Vice Governor Ihwa-young to 9 Years and 6 Months in Prison... Acknowledges Lee Jae-myung's Payment of North Korea Visit Expenses

Lee Hwa-young, former Deputy Governor for Peace of Gyeonggi Province, who has been on trial for charges including involvement in the alleged illicit North Korea remittance in which Ssangbangwool Group covered the costs of Lee Jae-myung, leader of the Democratic Party of Korea's visit to North Korea, was sentenced to a heavy prison term.

In particular, as the judiciary recognized that Ssangbangwool Group covered the costs of Lee Jae-myung's visit to North Korea, it is expected that judicial action against Lee, who has been investigated as an accomplice by the prosecution, will soon take place.

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On the 7th, the Criminal Division 11 of Suwon District Court (Presiding Judge Shin Jin-woo) delivered the first trial verdict for Lee, who was detained and indicted on charges including violation of the Foreign Exchange Transactions Act, violation of the Act on the Aggravated Punishment of Specific Crimes (bribery), violation of the Political Funds Act, and obstruction of justice. The court found most of Lee’s charges guilty and sentenced him to 9 years and 6 months in prison and a fine of 250 million KRW. Additionally, it ordered the confiscation of 325.95 million KRW.

On that day, the court separately sentenced Lee to 1 year and 6 months in prison for the violation of the Political Funds Act, and for the remaining charges including bribery under the Act on the Aggravated Punishment of Specific Crimes, violation of the Foreign Exchange Transactions Act, and obstruction of justice, sentenced him to 8 years in prison, a fine of 250 million KRW, and confiscation of 325.95 million KRW. The Criminal Act stipulates that when multiple crimes are committed concurrently, the heaviest sentence can be increased by up to half and imposed as a single sentence. However, Article 18, Paragraph 3 of the Public Official Election Act provides an exception, requiring separate sentencing for election crimes or political fund-related offenses such as illegal receipt of political funds.

Meanwhile, the court acquitted Lee of some charges, including violation of the Foreign Exchange Transactions Act related to unauthorized payments for the smart farm costs. However, since other charges are recognized as either ideal concurrence (one act constituting multiple crimes) or a single crime relationship (several acts constituting one crime under comprehensive or legal concurrence), the court decided not to issue separate acquittals.

Regarding sentencing, the court pointed out, "The defendant’s acts of receiving bribes and political funds over a long period without any sense of wrongdoing are of poor criminal nature, especially as a senior public official with considerable political experience, who betrayed the ongoing efforts over decades in our society to sever the collusive relationship between influential politicians and private companies."

Furthermore, the court stated, "While conducting exchange and cooperation projects with North Korea, the defendant should have proceeded cautiously within the bounds of the law. Instead, he recklessly mobilized private companies using his official position and paid large sums to North Korea through covert means, causing diplomatic and security issues. Even if the policy goal was to promote inter-Korean exchange and cooperation projects, the blameworthiness is high."

The court added, "From the investigation stage to the courtroom, the defendant denied all offenses and consistently made irrational excuses, making severe punishment inevitable," explaining the reason for the heavy sentence.

Lee was detained and indicted in October 2022 on charges of receiving bribes and illegal political funds worth hundreds of millions of won from Ssangbangwool Group between July 2018 and July 2022 by using corporate cards and vehicles provided by the group and paying false salaries to his aides.

During the trial, in March last year, he was additionally indicted on charges of asking former Ssangbangwool Chairman Kim Seong-tae to cover a total of 8 million USD, including 5 million USD for the smart farm project costs promised by Gyeonggi Province to North Korea and 3 million USD for Lee Jae-myung’s visit expenses.

A month later, in April last year, he was further indicted on charges of requesting Ssangbangwool Vice Chairman Bang Yong-cheol to delete data related to his use of corporate cards ahead of the prosecution’s investigation.

First, regarding the bribery charges, the court found Lee guilty of receiving bribes amounting to about 107 million KRW by using corporate cards provided by former Ssangbangwool Vice Chairman Bang Yong-cheol and others during his tenure as Deputy Governor for Peace of Gyeonggi Province, or by having his aide Moon pay false salaries.

The court stated, "Although the defendant denied the charges, testimonies from Bang Yong-cheol, Kim Seong-tae, and several Ssangbangwool employees, credit card usage records, and internal Gyeonggi Province documents confirm Lee Hwa-young’s bribery."

However, the court acquitted Lee of bribery charges related to receiving corporate cards and vehicles while serving as CEO of KINTEX, as the 'official duty relevance' required for bribery was not recognized.

Regarding the violation of the Political Funds Act, the court found Lee guilty of illegally receiving political funds amounting to about 218.3 million KRW by using corporate cards and vehicles provided by Bang and others or by having his aide Moon pay false salaries.

Similar to the bribery charges, the court recognized Lee’s guilt based on testimonies from Bang and Ssangbangwool employees, credit card usage records, and vehicle entry and exit logs.

However, the court acquitted Lee of receiving some corporate cards before his appointment as Deputy Governor for Peace of Gyeonggi Province, as he was not yet a 'person engaged in political activities' under the Political Funds Act, and thus the funds could not be considered provided for political activities.

The court also recognized some guilt regarding the North Korea remittance-related charges (violation of the Foreign Exchange Transactions Act) involving Lee Jae-myung, who is under investigation as an accomplice.

First, the court found Lee guilty of conspiring with Bang and others to mobilize Ssangbangwool employees to export a total of approximately 1.64 million USD abroad without reporting to the customs authorities, for the purpose of covering Gyeonggi Province’s smart farm costs.

The court cited testimonies from Bang and Ssangbangwool employees, National Intelligence Service documents, internal Gyeonggi Province reports, and meeting minutes prepared by Kim as evidence supporting Lee’s violation of the Foreign Exchange Transactions Act.

However, the court acquitted Lee of exporting 1.8 million yuan abroad via a hawala method, as it did not constitute 'carrying payment instruments abroad.' It also acquitted him of paying a total of 5 million USD to the Workers' Party of Korea, a financial sanctions target, for the smart farm costs, as there was no evidence of payment to or intent to pay the Workers' Party.

On the other hand, the court found Lee guilty of conspiring with Bang and others to mobilize Ssangbangwool employees to export approximately 2.3 million USD abroad without reporting to customs for the purpose of covering then-Governor Lee Jae-myung’s visit expenses to North Korea, and of paying about 2 million USD to the Workers' Party of Korea without approval from the Bank of Korea governor.

Besides testimonies from Bang, Ssangbangwool employees, and former Gyeonggi Province official Park, the court cited Gyeonggi Province official documents, notes from former Director of Peace Cooperation Shin, and receipts prepared by North Korean Song as physical evidence proving Lee’s violation of the Foreign Exchange Transactions Act.

However, the court acquitted Lee of exporting 700,000 USD abroad via hawala as it did not constitute 'carrying payment instruments abroad,' and acquitted him of paying 1 million USD to the Workers' Party of Korea through Lee Mo for the purpose of covering then-Governor Lee’s visit expenses, as there was no evidence of payment or intent to pay the Workers' Party.

Finally, the court recognized Lee’s guilt on charges of instructing evidence destruction.

It found Lee guilty of conspiring with Kim and others to instruct Ssangbangwool employees to destroy evidence related to his charges by shredding and replacing internal PC hard drives.

The court based its judgment on testimonies from Kim, Bang, and Ssangbangwool employees, as well as criminal rulings and call records of related persons previously tried for evidence destruction.

The court’s recognition of Lee’s guilt in covering Lee Jae-myung’s North Korea visit expenses through Ssangbangwool is expected to have a decisive impact on the prosecution’s future indictment of Lee Jae-myung and the court’s judgment on his guilt or innocence.

Earlier, at a bail hearing on the 21st of last month, Lee’s defense attorney stated, "Although Lee Jae-myung has not been indicted as a co-defendant with Lee Hwa-young in the North Korea remittance case, the indictment states that Lee Jae-myung, currently the opposition party leader, is named as an accomplice. A guilty verdict against Lee Hwa-young will inevitably serve as a strong judicial document presuming Lee Jae-myung’s guilt in the future."

The defense also pressured the court, saying, "Lee Jae-myung is expected to run in the upcoming presidential election. If a guilty verdict is rendered, the court must clearly explain the reasons for attributing guilt to Lee Jae-myung, who is listed as a co-conspirator with Lee Hwa-young."

Following the court’s acceptance of former Chairman Kim’s testimony and its guilty verdict on some of Lee’s North Korea remittance charges, the Democratic Party, which proposed the 'Special Prosecutor Act for Truth Investigation into the Prosecution’s Forced False Testimony in the Kim Seong-tae North Korea Remittance Case' on the 3rd, four days before Lee’s first trial sentencing, is expected to lose momentum in pushing for the special prosecutor law.

Meanwhile, the court sentenced former Ssangbangwool Vice Chairman Bang Yong-cheol, who was tried alongside Lee, to 2 years in prison after finding him guilty of violating the Political Funds Act and bribery. However, the court acquitted him of charges related to unauthorized payments violating the Foreign Exchange Transactions Act concerning smart farm costs and obstruction of justice in October 2021.

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