A former state auditor and aide to President Lee Myung-bak was arrested Monday on charges of taking bribes from a now-suspended savings bank that was seeking his influence to avoid punishment for extending illegal loans and other irregularities.
Eun Jin-soo, who resigned last week as a ranking member of the Board of Audit and Inspection (BAI), is accused of accepting 70 million won ($64,635) in cash and a diamond jewel worth about 30 million won from Busan Savings Bank. His brother is also suspected of taking 100 million won from the bank.
Prosecutors said they plan to seek a court-issued warrant within the day to prolong Eun's detention for further questioning.
In Korea, prosecutors must seek a detention warrant within 48 hours if they arrest a suspect during an emergency without a warrant or immediately release him or her.
Eun, a former prosecutor who worked for Lee's presidential election camp in 2007, reportedly denied most of the charges against him during 14 hours of questioning from Sunday, saying he received part of the money as a legitimate reward for offering legal consulting.
Appearing at the Supreme Public Prosecutors' Office on Sunday, Eun apologized in public for "causing concern" and vowed to cooperate with the investigation.
"I believe the truth will come to light through objective evidence," he said.
Prosecutors said they are expanding the probe to see if the bank bribed other high-ranking government officials and political heavyweights to prevent itself from being ousted from the market.
Busan Savings Bank was found to have engaged in extending illegal loans to large shareholders and other financial irregularities involving billions of dollars in total. The bank has also been accused of tipping off its employees' relatives and VIP customers about its impending suspension in February so as to help them withdraw their deposits in advance.
Prosecutors obtained testimonies from a lobbyist for the savings bank that Eun received hundreds of millions of won in bribes. Investigators believe Eun tried to exercise his influence to help the bank avoid an investigation by financial regulators.