(LEAD) Prosecutors raid home, office of ex-lawmaker embroiled in development scandal

(ATTN: UPDATES with separate police raid in last 2 paras)

SEOUL, Nov. 17 (Yonhap) -- Prosecutors on Wednesday raided the home and the office of a former opposition lawmaker accused of taking millions of dollars from an asset firm at the center of a massive corruption scandal in the name of severance pay for his son.

The Seoul Central District Prosecutors Office sent a team of investigators earlier to search the home and office of Kwak Sang-do, formerly affiliated with the main opposition People Power Party.

Kwak is facing a prosecution probe following revelations that his 32-year-old son received 5 billion won (US$4.2 million) in severance pay after seven years of work at Hwacheon Daeyu Asset Management. Investigators suspect the money is actually a bribe to Kwak

He has denied all allegations.

Prosecutors are currently broadening its probe into Hwacheon Daeyu, focusing on how the previously unheard-of asset management company and its seven affiliates were allowed to join a lucrative apartment development project in the Daejang-dong district of Seongnam City, south of Seoul, and reaped astronomical profits.

Following the revelations of severance pay, Kwak offered to give up his parliamentary seat, and the National Assembly voted last week to approve his resignation as lawmaker.

Following the search, prosecutors are expected to summon him soon for questioning.

In connection with the widening probe, police also raided the office of Hwacheon Daeyu in Seongnam as well as the home of Choi Youn-kil, former speaker of the city's legislature accused of taking 3 billion won in bribes from the owner of the embattled asset management firm.

Choi is known to have spearheaded the passage of an ordinance bill through the city's assembly in early 2013, which helped facilitate the launch of the development project, while he was serving as speaker. He is currently serving as an executive at Hwacheon Daeyu.

pbr@yna.co.kr
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