Probe into irregularities in Cho Kuk family foundation zeroes in on minister’s mother, brother

Prosecutors grill minister’s wife for third time over corruption charges

Published : Oct 9, 2019 - 14:50 Updated : Oct 21, 2019 - 18:54

A Seoul court on Wednesday refused to issue an arrest warrant for Justice Minister Cho Kuk’s younger brother, Cho Kwon. Prosecutors had sought the warrant over allegations of bribery and embezzlement via a school foundation owned and operated by the family.

The Seoul Central District Court said it would not authorize the arrest warrant in light of “the suspect’s health condition, his apparent admission of guilt and substantial evidence having already been collected.” The court also said some of the charges against him were “disputable.”

Cho’s brother had previously asked the court to change the date of his arrest warrant hearing, citing a herniated disk in his back. But prosecutors escorted him to Seoul after confirming he did not suffer from any health problems at a Busan hospital, where he was receiving treatment.

Prosecutors protested the court’s decision and said it would review whether to request the warrant again, given “the gravity of the accusations, and the degree of guilt having been substantiated by the suspect’s confession and other evidence.”

Cho Kwon is accused of filing two fraudulent lawsuits in 2006 and 2017 against the family foundation, Ungdong, where he served as the executive secretary.

Justice Minister Cho Kuk speaks during press conference held Tuesday. (Yonhap)

Prosecutors allege that Cho Kwon and his wife acquired a company owned by his father, which carried out 1.6 billion won ($1.37 million) worth of renovations for Ungdong. That company folded in 2005 and the couple then set up a new company in 2006.

In 2006, Cho Kwon sued Ungdong, claiming the foundation owed 5.1 billion won to the new company for the renovations.

The foundation did not defend itself and was obliged to pay the minister’s brother the amount he sought, plus interest of 100 million won.

Then in 2017 Cho Kwon took the case back to court, pursuing a larger award. Again, Ungdong did not defend itself and the court raised the amount to 10 billion won.

The lawsuits are believed to be a way of avoiding inheritance tax on his father’s wealth.

Another accusation facing the minister’s brother concerns 200 million won he allegedly accepted in bribes from job applicants seeking positions at a school run by the foundation in the 2010s. Two of the applicants have been arrested, one on Oct. 1 and the other Oct. 4.

According to prosecutors, Cho has admitted to accepting bribes through breach of trust.

On Tuesday, prosecutors said they had seized evidence suggesting the minister’s mother, Park Jung-sook, had received part of that money from her younger son. Park stepped down as the foundation’s director Aug. 23 after the allegations surfaced.

Prosecutors are looking into suspicions that Cho’s family may have used the funds to finance a private equity fund of which all the investors are members of the family.

The justice minister served on the foundation’s board until 2009.

Meanwhile, the minister’s wife, Chung Kyung-shim, was summoned Tuesday for the third time. The Seoul Central Prosecutors’ Office grilled Chung for 12 hours, from 9 a.m. to 9 p.m.

Chung stands accused of various offenses, from forging credentials in attempts to influence her daughter’s college and medical school admissions to profiting from her husband’s Cheong Wa Dae post through investments in the private equity. She is also accused of attempting to destroy evidence of the alleged misconduct.

By Kim Arin (arin@heraldcorp.com)