Controversy is growing after prosecutors on the 7th gave up an appeal in the "Daejang-dong development corruption case." The opposition bloc says prosecutors can no longer confiscate the real estate developers' revenue from the Daejang-dong case, but the Ministry of Justice says victims can recover their losses through civil lawsuits.
According to legal sources on the 10th, in connection with the Daejang-dong development case, prosecutors asked the court to confiscate 781.4 billion won out of the 788.6 billion won earned by Kim Man-bae, the major shareholder of the developer Hwacheon Daeyu, and his associates. Prosecutors applied the charge of "violation of the Conflict of Interest Prevention Act," saying they used official secrets. Bribes exchanged among members of the Daejang-dong development group were also included in the confiscation amount.
In the first-instance verdict, the court cut the forfeiture to 47.3 billion won. Citing reasons such as "information on the location of the Seopangyo Tunnel used by the defendants does not constitute an official secret," it acquitted or dismissed the charge of violating the Conflict of Interest Prevention Act. Only revenue from crimes stemming from breach of trust and bribes were set as the forfeiture.
Prosecutors sought to confiscate 611.1 billion won from Kim Man-bae, but the first-instance court recognized only 42.8 billion won. The amount that can no longer be recovered is 568.3 billion won. For Nam Wook, who owns Cheonhwa Dongin No. 4, a subsidiary of Hwacheon Daeyu, prosecutors sought to confiscate 101 billion won, but under the first-instance court's decision, Nam can keep the entire amount.
If prosecutors waive an appeal, under the principle of prohibition of unfavorable change, the sentence or the amount of forfeiture for the defendants cannot be increased beyond the first-instance ruling. As a result, Kim Man-bae can keep at least 568.3 billion won, and Nam Wook can keep 101 billion won.
In response, Na Kyung-won, Cho Bae-sook, Song Seok-jun, Park Jun-tae, and other members of the People Power Party on The National Assembly's Legislation and Judiciary Committee held a press conference at the National Assembly on the 9th, saying, "By giving up the appeal, prosecutors have deprived the state treasury of the chance to recover 781.4 billion won in forfeiture from the Daejang-dong group."
They added, "It handed astronomical gains and a free pass to a corrupt group, and tightly concealed the responsibility of Seongnam City's leadership," and called it "a serious matter that squarely defies the public's common sense and the demands of the rule of law."
Regarding forfeiture, Minister Jeong Seong-ho told reporters on his way to work that morning that the claim that "criminal revenue cannot be confiscated" is "completely untrue."
The Minister said, "Under the Act on Regulation and Punishment of Criminal Proceeds Concealment or the Act on the Forfeiture and Return of Property Acquired through Corrupt Practices, forfeiture or collection is what the state undertakes when there is no victim," adding, "This case has victims."
He continued, "About 200 billion won has been seized and preserved, and Seongnam Development Corporation, designated as a victim in this case, has filed a civil lawsuit," adding, "If prosecutors properly maintain the indictment and the scope (beyond legitimate revenue) is confirmed on appeal, and if it is properly proven in civil court, the 700 billion won can be recovered (in damages)."
The Democratic Party of Korea also made the same argument. Park Soo-hyun, the party's senior spokesperson, said at the party's Supreme Council meeting, "Seongnam Development Corporation is currently suing the Daejang-dong private operators for damages," adding, "If the breach of trust charge results in a conviction, the specific amount of damages will be determined in civil court."
Forfeiture is a criminal procedure that returns illegally obtained gains by the offender to the state finances. Under the Act on the Forfeiture and Return of Property Acquired through Corrupt Practices, victims can have forfeited or collected criminal revenue returned. Although a victim return process is required, victims do not need to file a lawsuit to receive the money. If a victim prevails in a civil suit, the offender must pay the set amount of damages to the victim.