SEOUL Jan 25 South Korean prosecutors have
detained and charged a Korean American with the illegal transfer
of a staggering 1.09 trillion won ($1.02 billion) in Iranian
money frozen in South Korea under international sanctions, the
lawyers said on Friday.
The Seoul Central District Prosecutors' Office said a
73-year-old man, identified only by his family name, Chung, was
suspected of making fraudulent transfers in 2011 from the
Iranian central bank's won-denominated account at a South Korean
bank by using fake invoices for payment.
Prosecutors marvelled at the scale of the withdrawals,
indicating they believed there had to be more than one person
involved. The prosecutors' office said those involved took
advantage of a banking procedure that was now more tightly
What was not immediately clear was whether this was an
attempt to break sanctions targeting Iran's controversial
nuclear programme, or whether this was just a criminal scam,
albeit a very large one. A prosecutor with direct knowledge of
the case declined to comment on whether the transfers violated
Chung had contacts in Iran and the United Arab Emirates and
was suspected of transferring the money into accounts in third
countries, the prosecutor said.
The prosecutors' office and the Industrial Bank of Korea
(IBK) confirmed media reports that identified the
state-owned lender as the financial institution that held the
Iranian central bank account.
IBK had received a payment order from the Iranian central
bank, the bank and prosecutors said. It believed the order to be
authentic because Chung had attached authorisation from the Bank
of Korea and a government agency that tracks exports of goods to
countries under international sanctions, the prosecution said.
Korean exporters and traders must get prior clearance from
the government for products they plan to sell to Iran.
"This is a criminal case perpetrated by an individual to
circumvent the Korea-Iran won transaction system and the Bank of
Korea's approval system," the prosecutors' office said in a
However, prosecutors couldn't track down who placed the
order from Iran because South Korea does not have an agreement
with Tehran to cooperate on criminal cases.
Chung was being held in detention and neither he nor his
legal representative was available for comment. Law enforcement
officials in South Korea often withhold criminal suspects' full
names because it possible for the accused to sue for libel
regardless of the outcome of the case against him.
International sanctions have made it difficult for Iran to
transmit oil payments from South Korea and other countries. The
Iranian central bank has an equivalent of $5-$6 billion in
won-denominated accounts in South Korea, industry sources have
"We believe involvement of (entities in) Iran is possible,"
the prosecutor said, requesting anonymity due to the sensitivity
of the matter.
South Korean exporters and traders usually collect payments
by withdrawing from won-denominated deposits of the Iranian
central bank that are mostly generated by Iran's oil sales in
South Korea's imports of crude oil from Iran dropped 35.6
percent last year after the sanctions were imposed, data from
state-run Korea National Oil Corp showed this month.
Iran had a $2.3 billion trade surplus with South Korea in
2012, official data shows.
($1 = 1,069 won)
(Reporting by Ju-min Park; Editing by Jack Kim and Nick Macfie)