Prosecutors sought two-year prison terms for former Seongnam Development Corporation planning chief Yoo Dong-gyu, attorney Nam Uk, accountant Jeong Young-hak and others in connection with alleged corruption in the Wirye New Town development. Some say this project served as a rehearsal for the "Daejang-dong development corruption scheme."
At a sentencing hearing held on the 28th before Seoul Central District Court Criminal Division 1, presided over by Senior Judge Lee Chun-geun, prosecutors asked the court to sentence Yoo Dong-gyu, Nam Uk and Jeong Young-hak, who were indicted on charges of violating the Anti-Corruption Act, to two years in prison each.
Prosecutors sought two years and six months for private businessman Jeong Jae-chang, a major shareholder of Wirye Asset Management, and one year for a person surnamed Ju, who was a development team leader at Seongnam Development Corporation. Prosecutors also asked the court to order Nam, Jeong and Ju to forfeit 1,410,62 million won each in unlawful gains.
In his final statement, Yoo said of the Wirye New Town development corruption allegations, "This was driven by the greed of me, Lee Jae-myung (then Seongnam mayor), and Jeong Jin-sang," adding, "As you can see from the Wirye project as well, every act took place within a reporting chain involving Mayor Lee Jae-myung, me, and then Jeong Jin-sang."
He continued, "All responsibility lies with me, Lee Jae-myung and Jeong Jin-sang," and said, "This crime was driven by my greed and Lee Jae-myung's greed, and also by Jeong Jin-sang's greed. I will accept any punishment."
Nam, in tears, said, "I am sorry to be standing here like this," bowing his head and adding, "Once again, I would like to apologize to everyone."
The Wirye New Town development project built and sold 1,137 units on the A2-8 block, a 64,713-square-meter site in Changok-dong, Sujeong District, Seongnam. The favoritism allegations center on claims that private businessmen, including Nam and Jeong, colluded with Seongnam Development Corporation officials and used inside information to be selected as the project operator, then made hundreds of billions of won in revenue.
In Nov. 2013, Seongnam Development Corporation established a special purpose company (SPC), "Pureun Wirye Project" (Pureun Wirye), with a private operator and pushed the project forward. The asset management company "Wirye Asset Management" played a role similar to "Hwacheon Daeyu" in the Daejang-dong development project.
Prosecutors say that after the development proceeded from Aug. 2014 to Mar. 2017 and generated 41.8 billion won in profit, private operators took 4.23 billion won in dividends and builder Hoban Construction took 16.9 billion won in dividends, according to the payout ratios set out in the shareholders' agreement.
Prosecutors believe private businessmen used their Wirye project experience to reap greater profits in the Daejang-dong project. When carrying out the Daejang-dong project, Nam and others asked former division chief Yoo to exclude construction companies from participation. Prosecutors say this was to prevent Hoban Construction from taking substantial profits in the Daejang-dong project as it had in the Wirye project.