Mass suicide incident, huh? I've never heard of any of this.
Extended excerpts:
In Ferry Deaths, a South Korean Tycoon’s Downfall
By CHOE SANG-HUN, MARTIN FACKLER, ALISON LEIGH COWAN and SCOTT SAYARE
JULY 26, 2014
Police officers and members of the news media at the scene where the body of Yoo Byung-eun was discovered. Credit Yonhap, via Agence France-Presse — Getty Images
SEOUL, South Korea — After all the lavish galas in his honor at landmarks like the Louvre and Versailles, the tens of thousands of devotees following his religious teachings for decades, the hundreds of homes and businesses reportedly stashed around the globe, Yoo Byung-eun ended up alone, his body splayed on its back and rotting in the weeds, empty liquor bottles by his side.
Weeks before, nearly 10,000 police officers had raided his church’s compound in the largest manhunt in South Korean history, armed with backhoes to dig up underground hiding places, only to leave empty-handed. They had almost caught him once, it turned out, but Mr. Yoo slipped away, hiding in a secret room behind a wall in a distant villa, almost $1 million in two suitcases at the ready.
After a lifetime of craving recognition, of building a flock that showered him with cash and helped fund a business empire selling everything from toys to ships, Mr. Yoo found his moneymaking machine brought more than his own undoing, prosecutors say. It also contributed to one of the worst peacetime disasters in the nation’s history — the sinking of the ferry Sewol in April, which killed 304 passengers, the vast majority of them high school students.
Millions of dollars from the web of companies, including the one that owns the ferry, went to Mr. Yoo, 73, and his two sons, prosecutors say, squeezed from the business through an increasingly perilous set of decisions that enriched his family at the expense of the passengers.
Scores of cabins and even an art gallery laden with marble were added to the ferry’s upper decks, making the ship top-heavy. So much extra cargo was crammed on board that there was sometimes no space to secure it properly with chains and lashings. And, prosecutors say, the ferry’s crucial ballast water, needed to balance all the additional weight, was deliberately drained so that the vessel would not sit too low — a telltale sign to inspectors that the ferry was dangerously overloaded to bring in more money.
“It was a miracle that the ship actually sailed as far as it did; it could have tipped over any time,” said Kim Woo-sook, dean of the graduate school at Mokpo National Maritime University. “For them, cargo was cash.”
Few events in recent memory have rattled South Korea more deeply than the sinking of the ferry, a disaster captured in haunting text messages and cellphone videos from students as the ship slipped into the Yellow Sea.
As the ferry first started tilting, some students did not yet grasp the danger, shouting, “This is fun!” and joking about posting the event on Facebook. But as the ship listed farther, panic spread, with students yelling, “We don’t want to die!” and recording hurried goodbyes to their parents.
“This looks like the end,” one boy shouted into a smartphone, before another cut in: “Mom, Dad, I love you.”
Reinventing a Swindler
Such scenes reverberated around the world. Since then, scores of people have been arrested in connection with the sinking, including regulators, the captain, officers and members of the crew. But at the heart of the tragedy, and the investigation into how it happened, sits one of the nation’s most eccentric, and now reviled, families.
“The Yoo Byung-eun family, which is the root cause of this calamity, is inviting the ire of the people by flouting the law rather than repenting before the people and helping reveal the truth,” said President Park Geun-hye, who has also been widely criticized for her government’s failure to prevent the disaster, much less find Mr. Yoo before his death. His wife and two of his four children are now in custody, and one son remains at large.
The Yoo family’s representatives did not provide answers to questions about the disaster, their businesses or their church. Many church members have said, however, that Ms. Park is trying to demonize the Yoos to deflect criticism from her government. But dozens of interviews with regulators, Coast Guard officials, prosecutors, dockworkers, crew members and family business associates seem to confirm the prosecutors’ contention that the Yoo family played a crucial role in the tragedy by cutting corners on the ferry’s safety, even as it was spending lavishly on itself.
The family used a sprawling group of at least 70 companies on three continents as a personal A.T.M., prosecutors say. In their own names or through companies that they control, family members own at least $8 million worth of real estate in the United States alone, including a condominium at the Ritz Carlton in Manhattan, and have the rights to be an American distributor of Debauve & Gallais, the French maker of luxury chocolates once favored by Marie Antoinette. In France, they own an entire hilltop village.
The family also spent tens of millions of dollars to lionize Mr. Yoo, a convicted swindler known best in South Korea in connection with the mass suicide of 32 members of a splinter group of his church more than two decades ago.
Mr. Yoo's photographs on exhibit at the Louvre in 2012. A Yoo family business donated $1.5 million to the museum. Credit Sylvain Collet
Hoping to reinvent him as a Zen-like artistic genius, a family business donated $1.5 million to the Louvre, which then etched his new identity — the pseudonym Ahae — in gold on a marble wall at the museum. The family inaugurated a worldwide tour of his photos at Grand Central Terminal in New York and spent nearly $1 million to rent space as part of a deal to exhibit his work for months at Versailles, the palatial former home of French monarchs.
A sumptuous affair to begin the event, catered by a Michelin-starred chef, drew ambassadors and celebrities like the mother of Carla Bruni-Sarkozy, the singer-model wife of the former French president, according to Le Figaro. At a separate concert at the end of the exhibition, the London Symphony Orchestra played, premiering a brand new piece: Symphony No. 6 “Ahae.”
In one of their more damning findings, prosecutors say that so much money was being siphoned away from the ferry company to Mr. Yoo and his relatives that it was starved of funds and spent just $2 last year on safety training for the Sewol’s crew members. The money went to buy a paper copy of a certificate.
During the accident, the chaos caused by the lack of training was clear. Some crew members readily admitted in interviews after the disaster that they had no idea what to do during the emergency, had never done evacuation drills and made fatal mistakes like repeatedly telling passengers over the intercom to “stay inside and wait” as the ship began to sink, dragging scores of students down with it.
The ferry company was able to cut corners so dangerously because South Korea’s system for regulating ferries — like so much of regulation in South Korea — is based on trust, riddled with loopholes, manpower shortages, petty corruption and a reliance on businesses to police themselves. The broad, tacit acceptance of lax safety standards to keep the economy humming has been blamed for everything from building collapses to a nuclear energy scandal over fudged testing results that has raised serious questions about the safety of the country’s 23 reactors.
Public outrage since the ferry accident has pushed President Park to vow to strengthen safety standards by rooting out what she called “layers of corruption,” including collusive ties between regulators and businesses.
In June, nearly 10,000 police officers raided the sprawling compound of Mr. Yoo's church, armed with backhoes to dig up underground hiding places, only to leave empty-handed. Credit Suh Myong-geun/Yonhap, via Associated Press
Mr. Yoo’s church, the Evangelical Baptist Church of Korea, now claims to have 100,000 members, adhering to a polarizing interpretation of how Christians reach salvation.
“They no longer have to repent, even if they commit such sins as adultery and thievery; they are lawless people,” said Jin Yong-sik, a Presbyterian pastor in Anseong and an expert on fringe churches in South Korea. “Yoo Byung-eun is a cult leader. He is deified as a Moses or a messiah among his followers, and they give him money as he pleases.”
Church leaders dispute the allegations, saying their religion is being vilified despite being rooted in the Bible. One of their tenets — a focus on health — appears to stem from Mr. Yoo’s frailty as a child, when he suffered from tuberculosis, and a personal preoccupation with cleanliness. He preached that cleansing the body and particularly the blood could help achieve spiritual purity, and wrote disapprovingly of fellow Christians’ lengthy prayers before meals that allowed “little white specks” of spit to fall in their food.
As Mr. Yoo built his church, he embarked on a second career, as a business magnate. Starting in the 1970s, he turned the church into a source of cash, investigators and former and current Salvationists say, by persuading adherents to donate to or invest their savings in his growing number of companies.
By the 1980s, he had built a mini-chaebol, or family-run business group, that over the years has included a dizzying array of products, from a top-selling shark oil supplement and organic milk to cosmetics, auto parts and special paint for nuclear plants.
He was recognized as a rising figure in the nation’s business world when the military dictator Chun Doo-hwan visited one of his factories in 1984. Two years later, Mr. Yoo was suspected of using his growing political connections to get into the business of operating passenger vessels, with one of his companies winning the right to run tourist boats on Seoul’s Han River when the city hosted the 1988 Summer Olympics.
Even then, Mr. Yoo’s vessels faced criticism for overloading. Once, when his company tried to board more than twice one vessel’s maximum limit of 200 passengers during a busy holiday season, irate passengers almost rioted, said Lee Cheong, a former Salvationist who worked as a crewman on the boat. He said Mr. Yoo watched the melee impassively from the pier.
Crashing to Earth
Mr. Yoo’s ascent was halted in 1991, when he was arrested after the deaths of 32 members of a splinter group from the Salvationists. They were found dead in the attic of a factory cafeteria in 1987; some of them had been hanged. An investigation by the police did not charge Mr. Yoo in connection with the deaths, ruling them a mass suicide that appeared to be a result of loans that the group could not repay.
But Mr. Yoo was convicted on charges of defrauding his church members by improperly diverting money to his businesses, charges that he denied until his death. He spent four years in prison, from 1991 to 1995.
The prison sentence, and the subsequent collapse of his business group during the Asian financial crisis in the 1990s, were a fall from grace from which few Koreans expected him to recover. But prosecutors say he bounced back quickly upon release and found ways to avoid public scrutiny.
First, after his companies went bankrupt, he regained control of his businesses by having his two sons buy back companies from receivership at fire-sale prices after a government recovery program had forgiven much of the debt, government officials and prosecutors say. With his sons and a daughter, Mr. Yoo then linked these companies in a tight web of murky cross-shareholdings that prosecutors contend Mr. Yoo controlled by placing family members and loyal church believers in executive jobs.
“They mixed religion with business, pooling donations from church members to use in buying and expanding businesses,” Lee Jin-ho, a prosecutor, said during a hearing in June. “Management, key shareholders and even internal auditors were all Salvationists, so there was no system of check and control. If the Yoo family demanded money, the companies complied.”
In a church sermon recorded in 2005, Mr. Yoo exhorted his followers to stick together against what he called continued persecution for their beliefs.
“Things are tough for us, and others treat us like rags, but we must remember: ‘Blessed are you when people insult you, persecute you and falsely say all kinds of evil against you because of me. Rejoice and be glad,' ” Mr. Yoo said, quoting from Matthew.
Three months later, salvage crews are still looking for 10 missing bodies, and the ship remains where it sank. Since the accident, prosecutors have frozen more than $100 million in assets from the extended Yoo family, including Bentley sedans and more than 200 apartments in South Korea.
But in recent years, the Yoo family companies have moved at least $33 million abroad, according to South Korea’s Financial Supervisory Service, the country’s financial watchdog. It, as well as prosecutors, says much of this money flowed into companies controlled by Mr. Yoo’s younger son, Keith, a fluent English speaker who married an American. The Korean authorities have asked their American counterparts to find and apprehend him. His brother, Dae-kyoon, was arrested in South Korea on Friday.
The elder Mr. Yoo, who had spent so much time and money trying to rehabilitate his image, suddenly found his photos splashed on posters across South Korea as the nation’s most wanted man. His body was ultimately found in an apricot orchard, near the villa where he hid behind a wall. The police said his corpse was too badly decomposed to determine the cause of death, leaving unanswered whether he committed suicide, died a natural death or was a victim of foul play.
In the end, the accident that toppled the Yoos involved just a tiny piece of their sprawling empire. Prosecutors say that the practice of dangerously overloading the Sewol over 13 months had earned the ferry company a relatively paltry $2.9 million, or about $9,500 for every passenger who died.
Also, missing chin alert:
Mr. Yoo's elder son, Yoo Dae-kyoon, 43, was arrested in South Korea on Friday. Credit Won Dae-Yeon-Donga Daily, via Getty Images
Anyways, if he had direct support from Chun Doo-hwan then I immediately would suspect his financial enterprise of having intelligence and also formal organized crime connections.
If anyone out there is interested in learning more about the insane brutality of Chun Doo-hwan's military dictatorship I highly recommend the film Peppermint Candy, directed by Lee Chang-dong. There are many other more recent films covering the same historical territory, but none as excellent.
I'm very interested in modern Korean history, but don't know nearly as much about it as I do about Japan. In other words, I can rattle off obscure facts about multiple zaibatsus but barely know shit about any of the main chaebols.
