Cho’s relative arrested on embezzlement charges
The relative, only identified as a 36-year-old man also surnamed Cho, was arrested on Saturday morning as soon as he arrived from the Philippines and was transferred to the Seoul Central District Prosecutors’ Office in Seocho District, southern Seoul, for questioning. Prosecutors had been waiting to place him under physical detention on allegations of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, specifically by gaining 500 million won ($424,000) or more through embezzlement. More crucially, prosecutors believe the relative was the mastermind behind hefty investments made by Cho’s wife and two children.
During a press conference early this month, the justice minister said he knew nothing about the family investments and that his wife was only taking advice from his first cousin once removed, who’s an “investment expert in the family.” Cho, however, tried to distance himself when asked about his connections to that relative, saying he only sees the relative once a year.
The relative had fled to the Philippines last month after the justice minister’s scandal arose. Cho and prosecutors had asked for him to return to answer questions.
Shortly after the relative was taken into custody Saturday, two businessmen linked to him were also summoned for another round of questioning after a local court struck down the prosecution’s request to detain them before trial - Lee Sang-hoon, 40, CEO of Co-Link Private Equity (PE) and a 54-year-old man only identified by his surname Choi, CEO of Wellscnt.
A judge at the Seoul Central District Court ruled last Wednesday there was no need to detain them because they mostly acknowledged the facts related to the allegations against them, as prosecutors seemed to have collected enough evidence related to those suspicions and because the two men did not play a pivotal role in the alleged criminal acts, based on evidence submitted by prosecutors.
Prosecutors believe it’s Cho’s first cousin once removed who played that pivotal role and who is suspected to be PE’s actual owner.
The court’s rejection was a setback for prosecutors because it was their first time filing a pre-trial detention warrant for anyone involved in the ongoing probe. Cho’s family invested 1.05 billion won in a private equity fund managed by PE called Blue Core Value-Up 1, including 950 million won invested in the name of Cho’s wife and 50 million won invested in the names of each his son and daughter.
Blue Core Value-Up 1’s total capital was 1.4 billion won, including investments from Cho’s brother-in-law and two nephews, which is why prosecutors see the private equity fund as basically being owned by the Cho family.
In mid-2017, Blue Core Value-Up 1 invested 1.38 billion won in a tiny company called Wellscnt, which produces street lamp control systems, becoming the largest shareholder. Soon after, Wellscnt’s performance started to take off as it landed deals with numerous local government offices and public companies.
Prosecutors are trying to figure out whether Cho, who worked as the presidential senior secretary for civil affairs from May 2017 to July 2019, pulled strings to help Wellscnt win contracts to the benefit of his family.
Cho’s snowballing scandal did not stop President Moon Jae-in from formally tapping him as justice minister on Aug. 9, a move met with criticism from opposition lawmakers and college students nationwide.
Yonsei University is planning to hold its first anti-Cho protest this Thursday on its school campus in Sinchon, western Seoul, following in the footsteps of Korea University, Seoul National University and Pusan National University.
BY JEONG JIN-HO, LEE SUNG-EUN [firstname.lastname@example.org]