Ex-President Lee Myung-bak’s former associates, including those who served as his asset managers during his presidency, are expected to attend trials or preparatory proceedings this week for their alleged involvement in Lee's bribery and other corruption charges.

Lee Myung-mo, the executive secretary of the Cheonggye Foundation, has long worked for the former president, mostly taking care of his property and assets. Lee, whose first preparatory proceeding is set for Wednesday, is accused of destroying ledgers that reportedly had records of the ex-president’s financial transactions, among others.

Lee is also suspected of embezzling funds from a subsidiary and a partner firm of DAS, an auto parts maker, of which prosecutors believe the former president is the real owner. The ex-president has insisted that the company belongs to his eldest brother, Sang-eun.

Lee Byung-mo is also suspected of lending funds -- about 4 billion won -- without security to a partner firm of DAS, which reportedly was heavily controlled by the former-president’s eldest son, Si-hyung.

 

Attending his first trial Friday is Lee Young-bae, the CEO of Kumkang, a DAS subcontractor. It is suspected that Lee was in charge of managing the former president’s assets and properties under borrowed names during Lee Myung-bak’s presidency.

He is suspected of embezzling his own company’s funds to create a slush fund, which authorities believe is associated with the former president. Kwon Young-mi, the widow of the former president’s late brother-in-law, Kim Jae-jeong, is the largest shareholder of Kumkang.

When illicitly embezzling his company’s funds, Lee reportedly fabricated documents, such as pay slips issued to Kwon, who reportedly never or rarely received salary from Kumkang. She was officially an auditor at the firm.

The two associates, Lee Myung-mo and Lee Young-bae, testified in 2008 that DAS did not belong to Lee Myung-bak, during a 38-day special investigation into financial fraud allegations involving then-President-elect Lee. At the time, Chung Ho-young, an independent prosecutor, declared the former president innocent.

The two men are reported to have changed their statements during their recent questioning, admitting that the former president was the real and secret owner of DAS.

 

Meanwhile, Lee Hyun-dong, former commissioner of the National Tax Service, is set to stand his first trial on Tuesday. He is suspected of illicitly accepting funds from the National Intelligence Service in 2010 to conduct a special investigation of an alleged offshore slush fund belonging to the late President Kim Dae-jung, and allegedly diverting the money for personal use.

The NTS and the NIS -- the national spy agency -- later concluded that the rumor was groundless. Authorities say it was illegal for the national tax agency to mobilize the NIS funds, which were specifically allocated for inter-Korean intelligence operations. Lee is also suspected of receiving bribes from NIS, totaling about 120 million won.

The former President Lee Myung-bak, who was taken into custody Thursday over multiple corruption charges including bribery, embezzlement and tax evasion, is scheduled to be questioned Monday at the detention center where he is being held. 

By Claire Lee (dyc@heraldcorp.com)