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November 20, 2009
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| Seoul Central District Prosecutors say they have discovered illegal activity by private weapon brokers involved with the Bulgom Project, an inter-governmental program to import Russian weapons as partial repayment of Korea’s 1991 loan to Russia. Investigators indicted a man surnamed Lee, head of weapons broker Ilgwang Gongyoung, with physical detention on charges of tax evasion, breach of public trust and embezzlement. Investigators allege Lee made a deal with a Korean residing in the United States surnamed Yun in June 2000 to grant Yun two-thirds of the profits from the weapons business with the promise to repay the money within 10 years. Yun is a well-known weapons broker. They allegedly collaborated to import $310 million in Russian weapons, including Metis-M Anti-tank guided missiles and a Murena landing craft air cushion, between 2003 and 2006. Currently, Korea and Russia are discussing details on continuing the project. The first period of the project was between 1995 and 1998 when Korea imported weapons, such as T-80U tanks, BMP-3 infantry fighting vehicles and man-portable surface to air missiles called the Igla. Both Lee and Yun allegedly received a $23.8 million commission from two Russian weapon manufacturers, KBP and ROE. Of that amount, Ilgwang Gongyoung allegedly embezzled $7.9 million. Experts said it is rare that the amount of the commission is revealed in the secret weapon brokerage businesses. The project is an inter-governmental affair in which weapon brokers cannot participate, according to experts. However, they say Ilgwang Gongyoung allegedly did so. “The Ministry of National Defense should have selected weapons to be imported but the ministry had a lack of information about Russian weapons. I believe the broker lobbied the ministry in exchange for providing the information,” said an official in the weapon brokerage business on condition of anonymity. Prosecutors discovered that Lee allegedly disguised the commission that Yun earned by showing that it came from weapons deals with Vietnamese weapons manufacturers. Lee allegedly brought the commission into Korea in the guise of a donation to a church in Donam-dong, northern Seoul. Ilgwang Gongyoung uses some rooms of the church as offices. Investigators also said Ilgwang Gongyoung allegedly evaded 1.26 billion won ($1.1 billion) in taxes. Prosecutors obtained secret military documents related to Korean attack helicopter production and Defense Security Command relocation during a raid on Ilgwang Gongyoung last June. Investigators said they will investigate whether Lee provided political funds to former high-ranking officials. By Lee Chul-jae, Lee Min-yong [smartpower@joongang.co.kr] |
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