The court dismissed the indictment in the case of former People Power Party lawmaker Kwak Sang-do, who was charged with receiving a large sum from private operators in the Daejang-dong project under the pretext of severance pay and concealing it. His son, Byung-chae, was acquitted.
The Criminal Division 23 of the Seoul Central District Court (Presiding Judge Oh Se-yong, Director General) on the 6th dismissed the indictment against former lawmaker Kwak, who was charged with violating the Act on Regulation and Punishment of Criminal Proceeds Concealment, among other charges. Byung-chae, who was charged with bribery and concealment of criminal proceeds under the Act on the Aggravated Punishment of Specific Crimes, was acquitted. Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management, who was brought to trial on charges of concealment of criminal proceeds, brokerage bribery, and violation of the Political Funds Act, was fined 5 million won.
The court found that the prosecution's indictment constituted an abuse of prosecutorial discretion. The court said, "Even though the prosecutor could have contested the prior case involving former lawmaker Kwak and Kim through the appellate process, the prosecutor exercised prosecutorial power arbitrarily with the intent to effectively obtain a second first-instance ruling through this indictment and overturn it," adding, "As a result, it can be assessed that former lawmaker Kwak and Kim suffered a substantial disadvantage by receiving two first-instance determinations."
Former lawmaker Kwak was indicted in 2022 on charges of receiving 2.5 billion won (bribery and violation of the crime of brokerage bribery) through his son, Byung-chae, in return for helping with business after receiving a request from Kim. In Feb. 2023, the court of first instance acquitted him of bribery and other charges, saying it was difficult to view the money that Byung-chae received from Hwacheon Daeyu as having been received by former lawmaker Kwak. However, the court found former lawmaker Kwak and attorney Nam Wook guilty of violating the Political Funds Act and fined former lawmaker Kwak 8 million won.
After the first-instance ruling, prosecutors conducted additional investigations and said they newly established that former lawmaker Kwak and his son had colluded and that the amount of funds received had increased, and they filed additional charges against former lawmaker Kwak, while also indicting Byung-chae and Kim. Byung-chae is accused of colluding with former lawmaker Kwak to receive, in Apr. 2021, benefits worth 5 billion won related to official duties (2.5 billion won actually received) from Kim. Prosecutors determined that former lawmaker Kwak received 2.5 billion won as consideration for requests and brokerage related to preventing Hana Bank's consortium from breaking up and as a bribe related to his duties as a National Assembly member, and that it was concealed by disguising it as Byung-chae's performance bonus.
Kim is also accused of colluding with former lawmaker Kwak to receive 100 million won in Apr. 2016 from attorney Nam Wook as consideration for requests and brokerage related to changes to the indictment and other matters to the prosecutor in charge of the second trial of his criminal case, and as political funds related to a National Assembly election.
At the sentencing hearing in Nov. last year, prosecutors sought nine years in prison, a fine of 5,010.62 million won, and forfeiture of 2,555.31 million won for Byung-chae. They sought three years in prison for former lawmaker Kwak. For Kim, they sought a total of five years in prison, combining two years for concealment of criminal proceeds and three years for charges including violation of the Political Funds Act.