Prosecutors scrutinize Cho Kuk’s bank records

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Prosecutors scrutinize Cho Kuk’s bank records

The prosecution has obtained a warrant and scrutinized the bank records of former Justice Minister Cho Kuk, a senior prosecution official said Wednesday.

According to the prosecution source, the probe recently took place after a local court issued a warrant, reversing its earlier rejections of prosecutors’ requests to look into Cho’s financial transactions. “We are looking into the bank records within the limited scope allowed by the warrant,” he said. “We did not seize and search his mobile phone.”

Because the Seoul Central District Court had rejected the prosecution’s earlier attempts to obtain a warrant to look into Cho’s bank records, speculation grew Wednesday that the prosecutors managed to persuade the court with new evidence convincing enough to link Cho to his wife’s suspected financial crimes.

Cho’s wife Chung Kyung-sim was detained on Oct. 23 to be questioned about a series of corruption charges including allegations that she had made unlawful stock investments using a private equity fund. The prosecutor questioned Chung on Tuesday, the fifth interrogation since she was put behind bars.

The Anti-corruption Investigation Department II of the Seoul Central District Prosecutors’ Office also raided the office of Cho at the Seoul National University (SNU)’s School of Law on Tuesday, fueling speculation that questioning of the former justice minister is imminent.

“The court probably issued the search and seizure warrant because it saw probable cause,” a professor of the SNU School of Law told the JoongAng Ilbo on Wednesday. “It is possible that the computer in the office contains data on Cho’s work.”

Cho, a professor of law at SNU since 2001, had served as the senior presidential civil affairs secretary of the Moon Jae-in Blue House from May 2017 till July this year. He was appointed as the justice minister in September 2019, but resigned after 35 days amid the expanding corruption scandal involving his family.

Shortly after the prosecutors raided Cho’s office at SNU, speculation was high that they were looking for evidence linked to the suspected academic fraud of his two children. However, after the prosecution official said Wednesday that Cho’s bank records are being scrutinized, observers are now saying that the prosecution is working to find evidence tying Cho to the private equity fund scandal.

Prosecutors are looking into whether Cho was involved in his wife’s dubious stock investments when he was working at the Blue House in 2018. Through Chung’s financial records, the prosecution learned that Cho had transferred 50 million won ($42,731) to her using an automated teller machine near the Blue House in January 2018. The prosecution believes that the money was linked to Chung’s stock investment.

Chung and her son and daughter, invested a large sum in a private equity fund, Co-link Private Equity (PE), operated by Cho’s first cousin. The fund invested in the Kosdaq-listed WFM in October 2017, and its stock price soared.

Cho’s money transfer to Chung took place on the same day that Chung purchased 120,000 shares of the WFK stocks at a price of 600 million won using a third party’s name.

The prosecution also obtained a statement from Chung’s younger brother that Chung is the actual owner of the 70,000 shares of the 120,000 shares of WFM. Certificates of the 120,000 shares were discovered when the prosecution raided his home in September.

The certificates of the 70,000 shares were reportedly moved from Cho’s residence to the home of his brother-in-law when speculation started that Cho would be named the justice minister.

If Cho had known about his wife’s stock purchase, he can be charged with a violation of Public Service Ethics Act, which prevents senior public servants and their spouses from making direct stock investments. He can also be charged with filing a false assets report to the government.

Because Chung had purchased the WFM stocks at prices cheaper than their market value, the difference can also be seen as a bribe.

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