South Korea Grapples with Recovering $23 Million illicit Fund Tied to Former President Roh Tae-woo
A decades-old slush fund of 30 billion won (approximately $23 million USD) amassed by former South Korean President Roh Tae-woo has resurfaced, sparking debate over its recovery following a high-profile divorce case and raising questions about the legal framework for seizing illicit gains. The funds came to light during the legal battle between SK group Chairman Chey Tae-won and Noh So-young, director of the Butterfly Art Center, and have prompted lawmakers to propose legislative changes, though progress has stalled.
The controversy centers on the difficulty of reclaiming assets linked to criminal activity when the primary suspect is deceased. According to a lawmaker on the National Assembly Legislative and Judiciary Committee, current law dictates that confiscation and additional collection are only possible as part of a judgment when a suspect is indicted and punished. “It becomes impossible” to recover funds in cases where a suspect dies before prosecution, rendering the pursuit of these assets legally untenable.
The Supreme Court recently acknowledged the illegality of the 30 billion won slush fund within the context of the divorce proceedings,determining that the money originated from bribes received by Roh tae-woo during his presidency. Though, the court’s ruling also underscored the lack of a legal pathway to return the funds to the national treasury.
In response, Representative Park Kyun-taek proposed an amendment to the “Regulation and Punishment of Concealment of Criminal Proceeds” on July 21st. This amendment woudl establish an “independent confiscation system,” allowing authorities to seize and collect illicit funds even if the original perpetrator cannot be prosecuted due to death or the expiration of the statute of limitations. the proposed legislation also addresses the complexities of inherited wealth, stipulating that assets derived from criminal activity can be confiscated even if subsequent owners were unaware of thier origins. Currently, prosecutors must prove a third party’s knowledge of the funds’ illicit source to initiate collection. For example, if Chairman Choi or Director noh were to claim ignorance of the funds’ origins, recovery would be blocked.
Several similar bills have been proposed. Representative Yoon Jong-oh and Representative Jang Gyeong-tae introduced related legislation in June and September of last year, respectively, focusing on amendments to the Criminal Act and the Special Act on the Statute of Limitations for Crimes Destroying Constitutional Order. Representative Park Joon-tae also proposed an amendment to the Criminal Procedure Act in September, advocating for the confiscation of inherited or gifted assets irrespective of the recipient’s knowledge. Despite being referred to the Legislation Subcommittee of the National Assembly last year and earlier this year, these bills have yet to be discussed. A Democratic Party official confirmed that “We have not discussed handling related bills yet.”
The origins of the 30 billion won were revealed when Director Noh asserted that funds “supported by his father contributed to the growth of SK” during the divorce proceedings. The Supreme Court’s ruling explicitly stated that “the source of this money appears to be bribes received by roh tae-woo while he was president” and that these actions “do not merit legal protection” in the property division.
The stalled legislative efforts highlight a critical gap in South Korea’s legal framework for addressing past corruption and re
