Prosecutors have frozen 12.1 billion won in assets belonging to a former journalist, a person surnamed Bae, identified as the beneficial owner of Cheonhwadongin No. 7, a private operator in the Daejang-dong development. Prosecutors judged that Bae acquired the Daejang-dong project dividends despite knowing they were criminal proceeds.
The Seoul Central District Prosecutors' Office said on the 5th that it executed a preservation of confiscation order on Bae, who is on trial for violating the Act on Regulation and Punishment of Criminal Proceeds Concealment. Preservation of confiscation is a procedure that prevents the disposal of assets suspected to be criminal proceeds before a guilty verdict is finalized.
The assets frozen this time total 12.1 billion won, including real estate and deposits under Bae's and family members' names. Prosecutors believe some of them are Bae's assets held under borrowed names.
Bae was found to have joined the Daejang-dong development project under the name of Cheonhwadongin No. 7 based on ties with private operator Kim Man-bae. Prosecutors believe Bae invested 10 million won and then received about 12.13 billion won in dividends.
In 2023, when prosecutors indicted Kim and other private operators in Daejang-dong for violating the Conflict of Interest Prevention Act, they also preserved Bae's assets for confiscation. At the time, prosecutors viewed Bae not as a defendant directly involved in the crime but as a third party who acquired corrupt assets despite knowing the proceeds were criminal.
Bae petitioned the court to cancel the preservation of confiscation, saying the prosecutorial action was unjust. Afterward, through additional investigation, prosecutors determined that Bae was not a mere third party but was actively involved in the process of obtaining Daejang-dong development profits. In March, prosecutors indicted Bae without detention for violating the Act on Regulation and Punishment of Criminal Proceeds Concealment.
The court also accepted prosecutors' renewed request for preservation of confiscation. Prosecutors believe Bae joined the Daejang-dong project by leveraging ties with Kim and that evidence confirms Bae took the dividends despite knowing they were criminal proceeds.
A separate process to recover criminal proceeds from Daejang-dong private operators is also underway. Prosecutors have frozen assets to confiscate or collect 200 billion won in criminal proceeds from Kim and others. Confiscation is when the state takes the property itself related to the crime, while collection is the procedure to recover the equivalent amount when confiscation is difficult.
However, in November last year, in the first trial of the Daejang-dong development scandal, the court imposed only 42.8 billion won in collection for the breach of trust portion and 1.65 million won for the Improper Solicitation and Graft Act violation on Kim. Because prosecutors did not appeal this part, Kim's side has petitioned the court to cancel confiscation and related preservation for the portion of the frozen assets that exceeds what was recognized in the first trial.