|May 12, 2014|
Previously published on May 1, 2014
April 24 marked another day of progress in holding kleptocrats accountable for their corruption.
On that day, the U.S. Department of Justice (“DOJ”) filed a civil forfeiture complaint to seize more than $700,000 in allegedly illicit funds from former South Korean President Chun Doo-hwan. The corrupt proceeds came from the sale of a Newport Beach house, purchased in 2005 by Chun’s son, Chun Jae Yong, who used funds that the former President had wrongfully obtained. According to the DOJ, the United States is collaborating in this matter with the Republic of Korea’s Supreme Prosecutor’s Office, Korea’s Ministry of Justice, and the Seoul Central District Prosecutor’s Office.
Chun was convicted in 1997 in Korea for accepting over $200 million in bribes and was ordered to pay restitution. According to Korean media reports, after paying back a small portion, Chun claimed that he had no money left to his name. Allegedly, Chun’s family members laundered the illicit funds into the United States.
The DOJ brought the case through its Kleptocracy Asset Recovery Initiative, a program that targets bribe-takers instead of bribe-payers, which we wrote about. We have seen the value of international cooperation in FCPA cases and notably, close cooperation between U.S. and Korean law enforcement was a key element in the Chun action too.
While the exact interplay between actions against kleptocrats and other anti-bribery actions is still evolving, the Chun case is the second significant forfeiture action announced in the last two months, further underscoring the steady momentum of anti-corruption enforcement. The Acting Assistant Attorney General of DOJ’s Criminal Division said that through the Initiative, the DOJ is “making crystal clear that the United States will not tolerate the use of its financial system by corrupt foreign officials - or their relatives - to harbor their ill-gotten gains.” Bribe-givers have known this for a long time. Recipients are starting to receive the same message.