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Suspect's wife holds back key evidence

The family of fraud suspect Kim Kyung-jun yesterday unveiled evidence allegedly incriminating presidential candidate Lee Myung-bak in a high-profile stock-price rigging and embezzlement scheme.
Lee Bo-ra, Kim's wife, showed journalists copies of the so-called "behind-the-scenes" contracts in a press conference in Los Angeles yesterday.

She refused to release the original versions, citing concerns that Lee Myung-bak could exploit it to his advantage. The originals will be submitted to Korean authorities no later than Friday, she said.

"We were planning to show you the original contracts, but we changed our minds after learning that prosecutors want Lee Myung-bak's signature for their investigation," Lee said.

The family argued that Lee Myung-bak could submit a different signature to prosecutors if he saw the one on the contracts. The documents were not released to the press.

Erica Kim, the suspect's sister, was meant to attend the press conference, but did not go.

Kim's wife disclosed four contracts yesterday -- one in Korean and three others in English. The Korean one, according to her, shows Lee owned BBK. Three others were written in the process of establishing EBK, a securities brokerage firm which Lee and Kim co-founded in 2000.

Lee said that the contracts were created in order to gain regulatory approval for the business operations. She added that LK-eBank served as a holding company of other financial firms, including BBK and e-Bank securities.

The Grand National Party flatly denied the existence of such contracts.

"If any contracts exist, then they could be the agreements signed when AM Pappas bought shares in LK-eBank," said GNP spokesman Park Hyeong-joon. AM Pappas is a paper company created by Kim.

"The contracts must have been forged. Lee Myung-bak had never signed any such documents."

LK-eBank, run jointly by the GNP candidate and Kim, is a financial holding company. It invested in BBK, an asset management firm Kim established in 1999. After the forceful closure of BBK by the government for fabricating client investment reports, Kim established a venture capital firm called Optional Ventures in 2001, through which he allegedly rigged stock prices and embezzled some 38 billion won ($40 million).

Upon his extradition last Friday, Kim gave copies of the contracts to prosecutors, who sent them to the National Institute of Scientific Investigation to verify their authenticity.

The GNP labeled Kim's family "accomplices" in the fraud case.

"Kim's family was involved in the scam and received most of the profits from the criminal acts, so they are all as guilty as Kim," said GNP spokeswoman Na Kyung-won.

Na also accused Erica Kim of being a key figure in the financial fraud.

"Erica Kim played a central role in the scam. She was actually involved in the operation of Optional Ventures as an executive. She is currently being sued by investors of the firm," said Na.

Several minor investors in Optional Ventures yesterday filed a complaint against Erica Kim and the suspect's wife with the Seoul Central District Prosecutors' Office. They said that Erica Kim, a U.S.-based lawyer, was directly involved in the stock price rigging.

U.S. courts found Erica Kim guilty of document forgery and money laundering last month. She stopped practicing law on Nov. 16.

Kim's wife also distributed to the press DVDs containing the deposition of Lee Jin-young, the GNP candidate's former secretary at LK-eBank. Lee Jin-young testified in the case, on the request of U.S. federal prosecutors, in August 2006 at the U.S. Embassy in Seoul. She said that BBK and LK-eBank were both subsidiaries of another financial holding company, e-Bank Korea.com, which was reportedly owned by Lee Myung-bak.

She also testified that the business cards Lee Myung-bak purportedly used specified that Lee was CEO of e-Bank Korea.com, whose subsidiaries included BBK, LK-eBank and eBank securities. This appears to corroborate suspicions that Lee was involved in running BKK with Kim.

"All the employees' business cards look like this. You have the securities company, the insurance company and other financial companies under that holding company (e-Bank Korea.com)," Lee testified.

The GNP, in response, dismissed the claims, saying the business cards were never used or fabricated by Kim.

The GNP candidate had previously told local media that he had no connections to BBK and owned no shares in it. In an interview with the JoongAng Ilbo newspaper in October 2000, however, he said that he founded BBK and attracted foreign investment through it. He later dismissed all previous news reports as "erroneous."

Meanwhile, the United New Democratic Party yesterday unveiled evidence that Lee was head of e-Bank Korea.com.

"Lee introduced himself as head of the financial holding company in March, 2000 when he was invited to a church in Gyeonggi Province," said UNDP lawmaker Chung Bong-ju. He added that Kim had registered on the church website as CEO of a company which owned BBK and other financial institutions.

Prosecutors requested the submission of the original contract yesterday. They are also reportedly considering asking the GNP candidate to submit a sample of his signature.

"We are striving to verify the authenticity of the documents Kim submitted. They are copies, so we are having difficulty in ascertaining whether they are real," said Kim Hong-il, the prosecutor in charge.

Authorities are, at the moment, focusing on the flow of the money Kim allegedly embezzled and tracing bank accounts.

By Song Sang-ho

([email protected])




2007.11.22

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