Former top court judge, media executive indicted over Daejang-dong scandal allegations

A former Supreme Court judge and a media executive were indicted on Wednesday on suspicion of involvement in a real estate development scandal that upended the last presidential election.

Proseuctors raid the office of former Supreme Court Justice Kwon Sun-il in Seocho District, southern Seoul, on March 21. [YONHAP]

A former Supreme Court judge and a media executive were indicted on Wednesday on suspicion of involvement in a real estate development scandal that upended the last presidential election.

According to prosecutors, former Supreme Court Justice Kwon Soon-il and Money Today media outlet chairman Hong Sun-geun are suspected of being part of a group of senior officials, politicians and businessmen who were promised 5 billion won ($3.6 million) in return for helping small asset management company Hwacheon Daeyu reap outsized profits from the Daejang-dong development in Seongnam, Gyeonggi.

Kwon is accused of working as an unregistered legal counsel for Hwacheon Daeyu after his retirement from the bench in September 2020.

Under Korean law, individuals who fail to register as lawyers with the Korean Bar Association can face prison sentences of up to three years or a fine of 20 million won.

According to prosecutors, Kwon’s work for Hwacheon Daeyu from January to August 2021 included appealing rulings in civil lawsuits involving the company, analyzing trial proceedings, writing briefs, and offering legal advice.

Kwon received 150 million won in legal fees from the company but only registered as its legal counsel with the Korean Bar Association in December 2022.

Prosecutors cited public comments by Lee Seong-mun, a former Hwacheon Daeyu CEO, that implied the company had hired Kwon for one of its civil lawsuits as evidence that he worked as a lawyer despite being unregistered.

But Kwon has denied the charges, saying that he merely advised Lee to engage a large law firm in the case.

Prosecutors raided Kwon's previous places of work in March this year.

Hong, on the other hand, has been charged with violating the Improper Solicitation and Graft Act as a member of the group of people promised 5 billion won for helping Hwacheon Daeyu.

According to prosecutors, Hong received a loan worth 5 billion won from company president Kim Man-bae, but was exempted from paying interest worth 14.5 million won.

Prosecutors have alleged that the unpaid interest retained by Hong constitutes de facto payment from Kim for his support of the company.

The scandal over Hwacheon Daeyu’s involvement in the Daejang-dong project is one of several criminal allegations that stalked former Democratic Party (DP) leader Lee Jae-myung during his run for the presidency in 2022.

Lee is currently under trial for allegedly skewing the profit distribution structure of the Daejang-dong project during his 2010-2018 tenure as Seongnam’s mayor.

Prosecutors have accused Lee of directing officials involved in the Daejang-dong development to grant preferential treatment to Hwacheon Daeyu, enabling it to pocket 57.7 billion won on an investment of 49.95 million won — a mere 1 percent stake in the project.

Lee is suspected of granting favorable treatment to the company because of his relationship with Kim, who interviewed Lee as a journalist in 2014 — an allegation both have denied.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]