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Prosecution searches residence of former financial watchdog official in fund scandal

All News 11:32 October 14, 2020

SEOUL, Oct. 14 (Yonhap) -- The prosecution said Wednesday it has searched the house of a former financial official in connection with its investigation into a financial fraud scandal involving two embattled private equity investment companies.

The Seoul Central District Prosecutors Office raided the house of the former employee, surnamed Yoon, who worked at the Financial Supervisory Service, the state financial regulator, Tuesday and called him in for questioning in connection with the scandal.

The scandal centers on two asset management companies, Lime and Optimus, whose sham private equity funds generated more than 1.5 trillion won (US$1.3 billion) in losses for some 4,000 investors. After heavy investment losses, the companies declared they were unable to return invested money to investors in October last year and June this year, respectively.

The investment fraud cases have recently spilled over to political and financial sectors following reports that the companies allegedly lobbied or engaged with several influential people, including presidential officials and ruling party lawmakers.

Yoon is accused of receiving kickbacks worth tens of thousands of dollars in return for introducing Optimus CEO Kim Jae-hyun to financial officials, including those in Hana Bank, which later sold Optimus fund products.

Previously, Yoon had claimed in a phone interview with Yonhap News Agency that the money came with no strings attached, denying any wrongdoing.

He was indicted and detained last year for receiving 20 million won (US$17,400) in bribery from a local banker in 2014 to offer him a favor in the agency's audit process and 10 million won also in bribery from a businessman to help him secure a bank loan. He was given a suspended prison sentence for the allegations in July. He appealed to a higher court and awaits trial.

The entrance of Optimus Asset Management in southern Seoul remains closed on Oct. 13, 2020. (Yonhap)


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