Daegang Dong Scandal Sparks Outcry Over Justice Ministry Decision

The Daegang-dong development scandal has erupted into a major controversy in South Korea’s legal and political circles, with mounting public scrutiny over the Ministry of Justice’s recent decision to forgo an appeal in the high-profile corruption case. The fallout, marked by rare public dissent from senior prosecutors and allegations of selective justice, has thrown the independence and integrity of the nation’s prosecutorial system into the spotlight.

On November 11, 2025, the Ministry of Justice announced the completion of its special investigation into the Daegang-dong case, a sprawling development project that allegedly funneled illicit gains to both private sector operatives and public officials. According to CCEJ (the Citizens’ Coalition for Economic Justice), the probe revealed that between 7,000 and 8,000 people were involved in the development, including numerous civil servants. The investigation led to charges against about 473 individuals—roughly 6% of those implicated—with the main defendant receiving an eight-year prison sentence and four years of probation, while others faced additional penalties.

Yet, the investigation’s findings have done little to quell public suspicion. The Ministry of Justice and the Supreme Prosecutors’ Office have both refused to release detailed information about the case, citing national security concerns. This lack of transparency has drawn sharp criticism from advocacy groups and the public alike, who argue that the investigation failed to fully disclose the facts or resolve procedural issues. As reported by CCEJ, "the situation has only fueled national suspicion, and we urge an independent parliamentary inquiry into the decision to drop the appeal."

The controversy deepened when it emerged that the prosecution, despite having initially sought heavy sentences and large asset seizures for the accused, decided not to pursue an appeal after the first trial. The trial court had found that the structure of the Daegang-dong project was designed to grant excessive profits to private interests, and handed down substantial sentences: eight years in prison and forfeiture of approximately 8.1 billion KRW for former city development executive Yoo Dong-gyu, and similar terms for businessman Kim Man-bae and others. However, the court only recognized breach of trust under regular criminal law, not under the special law for aggravated economic crimes, citing uncertainty in calculating the amount of damage. The result was that only about 473 billion KRW—just 6% of the 7,000–8,000 billion KRW in alleged losses—was actually recovered.

Prosecutors’ decision not to appeal this outcome has been described as highly unusual, especially given the scale of the alleged corruption. According to CCEJ, the prosecution’s own investigation and trial teams had formally recommended an appeal, but the leadership overruled them. This has led to speculation about possible improper instructions from higher authorities. The situation became even murkier when Deputy Prosecutor General Noh Man-seok, who had acted as interim chief, retired without providing any explanation for the decision-making process, leaving key questions about the chain of command and the rationale for the appeal’s abandonment unanswered.

In response, the Ministry of Justice has insisted that it merely offered an opinion and that the final decision rested with the prosecution, while the presidential office has denied any involvement. Still, the lack of clarity has only intensified calls for an independent fact-finding investigation. CCEJ has demanded that a parliamentary inquiry be launched to determine whether evidence was distorted during the investigation, whether political considerations influenced the handling of the case, and whether any improper interference occurred from the Ministry of Justice, the prosecution’s leadership, or the presidential office.

Adding fuel to the fire, on November 10, 2025, a group of 23 senior prosecutors—including 15 current district prosecutors and 8 former branch chiefs—issued a collective statement on the prosecution’s internal network, protesting the decision to drop the appeal. This unprecedented act of internal dissent, quickly dubbed a "prosecutors’ mutiny" by the media, has exposed deep divisions within the prosecutorial ranks. According to Newstapa, such open defiance by public officials against their own leadership is almost unheard of. The group’s silence during the earlier decision not to appeal the detention of former President Yoon Suk-yeol has led some observers to accuse the prosecutors of "selective justice."

Yet, the credibility of the dissenting prosecutors has also come under scrutiny. Newstapa’s investigation revealed that several of the 23 prosecutors who signed the protest statement have themselves been implicated in the misuse of government funds, specifically special activity funds (known as "teukhwalbi"). For instance, Lee Man-heum, chief prosecutor of Uijeongbu, received 1 million KRW in special funds while serving in a non-investigative role as human rights officer—an appointment that typically does not require such funds. Similarly, Yong Seong-jin, now chief of Suncheon, took 1 million KRW in special funds while leading a trial division, which does not conduct direct investigations. These revelations have raised questions about the basic integrity and qualifications of the prosecutors involved in the protest.

Perhaps most striking was the case of Kim Yoon-seon, chief of Cheonan, who received a total of 2.7 million KRW in special funds while serving as head of the criminal division at Seoul Eastern District Prosecutors’ Office. Records show that Kim took 700,000 KRW and 500,000 KRW in special funds just before the Chuseok and Lunar New Year holidays, respectively. Notably, every division head in the office—including those in non-investigative roles—received similar payments at the same time, strongly suggesting the funds were distributed as holiday bonuses. As Newstapa noted, "the practice of distributing special funds as holiday gifts is a clear misuse of public money." The outlet further observed that, despite the widespread nature of this practice, no prosecutor has ever publicly objected to it.

Special activity funds are intended for covert investigative operations, and their use is supposed to be strictly regulated and confidential. However, the pattern of disbursement uncovered by Newstapa suggests that these funds have often been treated as discretionary bonuses, undermining both financial accountability and public trust. The Ministry of Justice has so far declined to comment on these findings, and the investigation committee has cited national security concerns as a reason for withholding further details.

Meanwhile, the government is reportedly considering demoting some of the prosecutors involved in the protest to lower-ranking positions. CCEJ has warned that targeting individual prosecutors before the full facts are established could jeopardize the independence and transparency of the ongoing investigation. The advocacy group also criticized proposals by the Democratic Party to amend disciplinary laws in ways that could undermine prosecutorial independence, arguing that such moves should be suspended until the facts are fully clarified. "Any discussion of abolishing the crime of breach of trust or making other sensitive legal changes before the facts are established is premature and risks further eroding public confidence," CCEJ stated.

In the end, the Daegang-dong case has become a flashpoint for broader concerns about transparency, accountability, and the rule of law in South Korea. With both the investigation and its aftermath mired in secrecy and controversy, many are now calling for an independent parliamentary inquiry to uncover the full truth. Only then, advocates argue, can the public hope to see a fair and just resolution to one of the country’s most contentious legal battles in recent memory.