The prosecution has arrested Yoo Dong-gyu, a key figure in the project to develop Daejang-dong in Seongnam, Gyeonggi Province, on charges of breach of trust and bribery. The court granted prosecutors a warrant on Sunday.

He is the first suspect charged in connection with the land development scandal.

Yoo is accused of causing damage to Seongnam by designing a profit share scheme that favored a certain company and its seven affiliates. Under the scheme, the city received 182.2 billion won ($153 million) in fixed dividends while the civilian investors whose investment totaled 350 million won reaped 404 billion won in variable dividends.

At the time of designing the profit model, Yoo was the chief of the planning headquarters of Seongnam Development Corp. and later was promoted to acting president.

The dividend structure favored Hwacheon Daeyu, then an unknown small company that the corporation chose as asset manager of the project. Yoo is suspected of having received about 800 million won in bribes from the firm’s owner, Kim Man-bae. The prosecution suspects that he also sought to secure a large sum in dividends from Hwacheon Daeyu.

The public eye has fallen on ties between Yoo and Gyeonggi Gov. Lee Jae-myung, who is the front-runner of the ruling Democratic Party of Korea’s race to be its presidential candidate. Lee authorized the Daejang-dong development project as mayor of Seongnam. Yoo is suspected of being deeply involved in the composition of shareholders in the project consortium and the structure of dividends.

Yoo is said to have gotten acquainted with Lee in 2008 as head of an apartment complex remodeling association in Seongnam. Lee was then a practicing lawyer. Yoo helped Lee with his successful campaign for Seongnam mayoralty in 2010 and was appointed as head of the planning headquarters of Seongnam Development Corp. After Lee was elected Gyeonggi governor, he appointed Yoo as chief executive of the Gyeonggi Tourism Organization.

Developing Daejang-dong, an area favored by many people, was one of Lee’s signature projects when he was Seongnam mayor. It is common sense to think that Lee placed his most reliable figure in a working-level position to carry out such project.

Lee denies that Yoo is closely tied with him. But the Seongnam government fully invested in Seongnam Development Corp. Few would believe that a senior official of an organization affiliated with the government decided unilaterally on important matters related to the project.

Jung Young-hak, an accountant who owns Cheonhwa Dongin No. 5, one of Hwacheon Daeyu’s seven affiliates, recorded dialogues between Hwacheon Daeyu’s and its affiliates’ shareholders and Seongnam Development officials, including Yoo, for the past two years.

Jung presented 19 audio files to prosecutors investigating the scandal. According to news reports on the transcripts, Yoo is suspected of being the real owner of Cheonhwa Dongin No. 1, which is owned by Kim Man-bae. Yoon is said to have been promised 70 billion won in dividends in reward for his profit distribution scheme.

Separately from Yoo’s arrest, suspicions about a possible deal between Kim and former Supreme Court justice Kwon Soon-il has also drawn attention. Kim is found to have visited Kwon’s office on eight occasions from July 2019 to August 2020. On July 16 last year, the top court ruled to the effect that Lee did not violate election laws as a candidate for Gyeonggi governor. Kwon is said to have ruled in favor of Lee.

After Kwon retired, Hwacheon Daeyu hired him as an adviser and paid him about 15 million won in monthly advisory fees. Kwon resigned as Hwacheon Daeyu adviser shortly after the scandal broke out.

Both the prosecution and the police are investigating suspicions involving Hwacheon Daeyu.

The prosecution searched Yoo’s residence but reportedly failed to seize his mobile phone because he threw it out of the window just before investigators entered his residence. His mobile phone is one of the important pieces of evidence that may decide on the direction of the investigation.

Yoo is said to have expressed an intention to hand over his old mobile phone to the prosecution, but the prosecution has not been able to secure it yet, saying that Yoo refused to identify who is in possession of his old mobile phone.

Prosecutors are being criticized for not being strong-willed enough to secure the evidence and expand their probe beyond Yoo. President Moon Jae-in’s regime has filled key posts of the prosecution with prosecutors regarded as loyal to it.

Suspicions keep arising. If prosecutors attempt to bury part of the suspicions, a special prosecution will verify their investigations someday.