Prosecutors on Monday raided the residence and office of former President Lee Myung-bak’s elder brother as part of a probe into allegations that he accepted illicit funds from the state spy agency.

Investigators from the Seoul Central District Prosecutors’ Office searched Lee Sang-deuk’s home in Seongbuk-dong and office in Yeouido, seizing documents and computer hard drives.

Prosecutors said they have obtained testimony from a high-ranking official of the National Intelligence Service that the state spy agency delivered hundreds of millions of won from its off-the-books “special activities” funds to Lee Sang-deuk. 

Monday’s raids come as the prosecution widens its investigation into the alleged transfer of NIS funds to the presidential office during Lee Myung-bak’s 2009-2013 term. Several former aides of Lee have been arrested or questioned as suspects in the illicit provision of funds.

Prosecutors are paying attention to the fact that Kim Ju-seong, a longtime associate of Lee Sang-deuk who worked together with the former president’s elder brother at Kolon Group for decades, served as the director of planning and coordination at the NIS between 2008 and 2010.

Kim served as vice chairman of Kolon Group, and Lee as the chief executive of a Kolon affiliate.

The appointment of Kim as a NIS director despite his lack of related experience had drawn attention at the time.

Kim reportedly told investigators that he received the first request for money from Cheong Wa Dae in March 2008, and that similar requests continued even after he raised concerns in a one-on-one meeting with then-President Lee. Kim allegedly arranged the delivery of funds to Kim Paik-joon, then senior secretary to Lee for administrative affairs.

Prosecutors are looking into the confiscated items, not ruling out the possibility that the money from the NIS could have been spent for Lee Sang-deuk’s political activities.

The 83-year-old former six-term lawmaker, who wielded wide-ranging influence during his brother’s presidency, had been jailed for taking bribes from a savings bank. He is on trial over a corruption case involving steelmaker Posco.

The investigation into the NIS funds case is expanding to yet another family member of the former president -- his wife.

Prosecutors said they cross-interrogated a former assistant to then-first lady Kim Yoon-ok and Kim Hee-joong, then-presidential secretary for private affairs, to verify Kim’s confession that he delivered $100,000 from the NIS fund to her through an assistant in 2011. The ex-assistant reportedly admitted to part of the allegation.

By Kim So-hyun (sophie@heraldcorp.com)