Seoul to ask FBI for help in tracking Yoo family

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Seoul to ask FBI for help in tracking Yoo family

The prosecution is intensifying its investigation into corruption allegations against the family behind the company that operated the Sewol ferry by seeking arrest warrants for three close aides of Yoo Byung-eun, its patriarch. Prosecutors also stepped up efforts to summon Yoo’s second son by seeking the help of U.S. investigation agencies, including the Federal Bureau of Investigation. The son, Yoo Hyeok-gi, is believed to live in the United States.

Prosecutors yesterday sought arrest warrants for Byun Gi-hoon, the president of I-One-I Holdings, a holding company, as well as Semo Group President Ko Chang-hwan. The holding company owns a large stake in Chonhaiji, a shipbuilding unit that holds the largest stake in Chonghaejin Marine Company. The defunct Semo Group is a predecessor of the Chonghaejin. The two men are suspected of providing slush funds to Yoo.

The Incheon District Prosecutors Office on Tuesday sought arrest warrants for Lee Jae-young, the head of Ahae Corp., on suspicions of breach of trust and facilitating financial irregularities allegedly committed by Yoo. Ahae Corporation is a paint manufacturer owned by the Yoo family.

Prosecutors claim that Lee helped Yoo extract more than 1 billion won ($977,950) from Ahae through an illegal lending scheme. Yoo and his family members are already facing a range of corruption charges, including embezzlement, tax evasion and illicit foreign trading.

A team of police and prosecutors is investigating whether the family’s corporate misconduct led to unsafe practices by Chonghaejin Marine Company, the operator of the Sewol. The company’s name Ahae is also the artistic moniker used by the 73-year-old Yoo when he works as a photographer.

Aside from artistic aspirations, authorities are claiming that Yoo sells his photographic works to his own affiliated companies to siphon money from them. Lee allegedly purchased Yoo’s works on behalf of Ahae Corp., paying 100 million won for eight photos. Also under investigation is a former head of the paint company.

Lee Gang-se, former head of Ahae Corp. who is also accused of helping Yoo siphon off corporate money, said that Ahae paid consultation fees to a shell company operated by Yoo. The former head said those actions were company custom and had taken place before he became Ahae CEO. On another occasion, the Yoo family allegedly siphoned off 50 billion won from its direct marketing subsidiary Dapanda by disguising it as commission fees, according to prosecutors.

Investigators said they will ask for help from the FBI and Homeland Security Investigations to question Yoo’s second son. As a major shareholder of Chonghaejin Marine, the junior Yoo is suspected of keeping and managing slush funds in overseas accounts.

The prosecution said the elder Yoo, the main target of the investigation, is expected to be summoned next week for questioning.


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