Special Counsel Seeks Eight-Year Sentence in Embezzlement Case Linked to Former First Lady’s Associate
A special counsel team investigating allegations surrounding former first lady Kim Keon-hee has requested an eight-year prison sentence for Kim Ye-sung, a close associate of Ms. Kim’s family, in a case involving embezzlement. The initial ruling for Kim is slated for February 5 of the upcoming year.
The special counsel team, led by Min Joong-ki, presented its sentencing demand during a hearing before the 26th Criminal Division of the Seoul Central District Court. They are seeking not only an eight-year jail term but also the confiscation of 432,338,463 Korean won from Kim, who faces charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes, specifically concerning embezzlement.
During the proceedings, the prosecution argued that Kim had exploited corporate structures to misrepresent personal expenditures as legitimate business activities, thereby securing undue tax advantages. They further pointed to Kim’s actions as the special counsel investigation intensified, including attempts to flee the country and the disposal and concealment of mobile phones, as evidence of a lack of remorse and an effort to obstruct justice.
Kim’s connection to the special counsel investigation stems from suspicions that he leveraged his acquaintance with Ms. Kim to secure preferential investments from major corporations and financial institutions. A notable instance cited is IMS Mobility, a car rental company where Kim held shares and was involved in its establishment. This company reportedly received an investment of 18.4 billion Korean won in June 2023, during the second year of the current administration.
The special counsel’s indictment against Kim alleges that he improperly siphoned approximately 4.69 billion Korean won from these investment funds through a wholly-owned subsidiary, InnoBest Korea. This sum was reportedly used to cover personal loans, housing expenses, and his children’s educational costs. Additionally, there are allegations of Kim having paid his spouse fictitious salaries. While the prosecution sought the confiscation of around 400 million Korean won, they clarified that amounts attributable to his children or IMS Mobility CEO Cho Young-tak were excluded from this demand.
Defense Contests Jurisdiction and Claims Lack of Connection to Power
Kim’s defense team has argued that the case falls outside the purview of the Act on the Appointment of Special Prosecutors, advocating for the dismissal of the indictment on jurisdictional grounds. In their closing arguments, Kim’s attorney questioned the outcome of the comprehensive investigation, which was initiated based on suspicions of leveraging an acquaintance with Kim Keon-hee to secure investments and misuse funds. The defense asserted that the investigation revealed no links to power-related corruption or Ms. Kim, concluding that the matter solely concerns the defendant’s personal financial transactions.
The defense further highlighted what they perceived as selective prosecution. They pointed to the special counsel’s decision not to investigate allegations of “collusion between religion and politics” involving the Unification Church, despite hearing testimony that reportedly implicated the Democratic Party. The attorney argued that just as those suspicions were deemed outside the scope of the special counsel’s mandate and transferred to the police, Kim’s case, which they maintain is unrelated to Ms. Kim, should also be excluded and sent to the police. The defense contended that the selective prosecution of certain cases while excluding others constitutes a targeted and unfair approach.
Moreover, the defense argued that the embezzlement charges are inapplicable because InnoBest Korea and related entities are wholly owned by Kim, effectively making them sole proprietorships. They also maintained that the funds in question were used for legitimate business expenses or constituted valid loans, thus causing no actual harm to the company.
Defendant’s Personal Statement and Plea for Leniency
In his final statement to the court, Kim alluded to a past association with a prosecutor couple approximately 12 to 13 years prior, describing one of them as a principled individual who was demoted for upholding their beliefs. He noted that this prosecutor later became president. Kim stated that he was subsequently removed from his company under the pretext that his ties to a specific politician would jeopardize the business.
Kim acknowledged his “mistake” in attempting to reduce taxes and company expenses, expressing deep regret for the “wrong methods and choices” he made. However, he vehemently denied any connection to Ms. Kim, asserting that he had “never been to the Hannam-dong official residence or the Presidential Office.”
He further addressed the media’s portrayal of him as “Kim Keon-hee’s butler,” a label he rejected, stating that he is an entrepreneur with a business vision, not someone exploiting a position of power. Kim pleaded for leniency, requesting the opportunity to reflect on the tax-related issues, take full responsibility, protect his family, and return to society as a law-abiding citizen.
