The prosecution on Monday questioned former President Chun Doo-hwan’s brother-in-law in a widening probe into the former military strongman’s hidden assets.

Investigators believe that Lee Chang-seok, brother of Chun’s wife Lee Soon-ja, played a crucial role in concealing massive slush funds of the former president’s family for nearly 30 years. Not only is he suspected of managing Chun’s slush funds, Lee also allegedly helped Chun’s children amass fortunes through illegal transfers of wealth.

Lee appeared before Seoul Central District Prosecutors’ Office at around 9:50 a.m. on suspicion of assisting Chun’s second son Jae-yong in securing loans for his own business, prosecutors said. Lee allegedly offered his property as collateral to a local bank so that BL Asset, owned by the junior Chun, could apply for a large loan.

Last week, prosecutors raided two branch offices of a savings bank that lent money to businesses owned by Chun’s family. Sources say that the prosecution may have found evidence pointing to illegal activity by the banks using Chun’s assets. BL Asset has borrowed some 9.7 billion won ($8.7 million) from the two branches since late 2000, sources at the prosecution office said.

Lee is the first member of Chun’s family to be summoned by the prosecution as part of an ongoing investigation into Chun’s hidden assets. Lee’s summoning indicates that the authorities are not only searching for concealed assets but also seeking ways to prosecute Chun and his family. The prosecution is reportedly considering indicting Lee as well on charges of helping Chun and his family accumulate wealth through bribes that the former president took while he was in power in the ’80s.

The prosecutors’ office has been operating a special team to locate Chun’s hidden assets since May in an effort to collect outstanding fines from the former president.

In 1997, Chun was sentenced to life in prison and ordered to pay 220.5 billion won ($198.1 million) in penalties for leading an insurrection and accepting bribes while he was in power from 1980 to 1987. Of the total, 167.2 billion won remains outstanding.

The prosecution also plans to summon Chun’s two sons, Jae-yong and Jae-kook, over suspected tax evasion and amassing of illegal funds. The authorities have requested U.S. tax and law enforcement agencies for assistance with the family’s case as they have long suspected the clan of concealing their assets overseas.

Prosecutors have been zeroing in on Chun and his family on suspicions that the former president managed secret funds with bank accounts under names borrowed from his relatives. 


By Cho Chung-un
(christory@heraldcorp.com)