Prosecutors have acquitted all people involved in the so-called "false letter" scandal involving an imprisoned Korean-American businessman accused of falsely raising embezzlement allegations against incumbent President Lee Myung-bak during the 2007 presidential race.

The Seoul Central District Prosecutors' Office, which has been investigating the case since January, said there was no behind-the-scenes political influence that masterminded the writing of the letter.

The letter, which surfaced in 2007 at the height of the last presidential election, claimed that the previous administration made a "deal" with Kim Kyung-jun, who has been imprisoned in South Korea since the scandal, to come to Seoul and make unfounded accusations against Lee. This was allegedly so Lee, who was a former Seoul mayor and presidential hopeful, could be defeated in the polls.

The then-opposition party, the current ruling Saenuri Party, claimed that the letter was proof that the liberal Roh Moo-hyun administration was engaged in unfair efforts to distort the truth so its candidate could win the election, because Lee was leading in the polls.

Kim is a former business partner of Lee and former head of investment firm BBK, an Internet financial company involved in a stock scandal. Kim accused Lee of embezzlement and stock price manipulation related to BBK. A South Korean court, however, subsequently found Kim's claims against Lee lacked evidence and meted out a prison term.

Prosecutors said Shin Myung, a local whose brother was incarcerated in a U.S. prison with Kim, conveyed what he heard from his brother to Yang Seung-duk, an administrator at Kyung Hee University in Seoul.

Yang had political ambitions and wanted to score points with Lee Myung-bak's supporters, and asked Shin to write a letter that hinted Kim entered the country after an agreement was reached with the then-ruling party.

"It seems that throughout the entire process, Lee's campaign aides, including former lawmaker Hong Joon-pyo, who made public the letter in the first place, did not know how it came to be written," the prosecutor's office said.

It said that the letter incident was the result of Shin and Yang trying to win favor with the likely victor of the presidential race. Officials claimed Shin wanted to get his brother out of prison and hoped the letter would help his cause.

Despite such conclusions, Shin told reporters after the Public Prosecutors' Office made the announcement that he still felt certain that there were political manipulators behind the letter scandal.

He conceded that he wrote the letter himself, as announced by investigators, but said he was under the impression that Yang was being swayed by individuals in influential positions.

Shin said that he distrusted the results of the investigation, and will take the matter to any political parties willing to believe his story. (Yonhap News)