Secret Deal Between Construction Companies and Gangs

Around 10 a.m. on June 29, 2002, Chairman Kim Chong-kyun (51) was beaten by about 30 young thugs in the management office. He is the representative of all the residents who live in Kahrak City Apartment Complex 1 and 2 (6,600 households) and is in charge of the redevelopment of those complexes in Kahrak Dong, Songpah Gu, Seoul. For rebuilding them, it is estimated to cost 1.5 trillion won (approximately, $1.1 billion).

He is diagnosed with 4 broken ribs and severely damaged eyes, requiring 8 weeks of hospitalization. Chae Hyung-ki (39), one of his aides who was also on hand with Kim, was also severely injured, needing 5 weeks of hospitalization.

According to the police investigation, the young thugs were mobilized by Yoopi, Inc., which provides specialized service in dismantlement and is under contract with a company whose initial is S (herein after S, Inc.).

A police officer said, “The suspects stated that the beating was purely accidental. It happened while we are protesting against Kim’s demanding for removal of placards on the Complexes.”

But Kim and others argued, “They were hired to block me [Kim] from attending the convention meeting of a partnership (July 13th) sponsored by S, Inc. and its affiliates. I [Kim] have been a little hostile to S, Inc.”

Susuh Police Station, which was in charge of this case, closed their investigation with indicting 3 of them without bail, 2 with bail and 1 put on the wanted man list. Especially, it just indicted Yoopi’s president Mr. Lee (45) who mobilized the young men without putting him behind bars, and did not do anything at all regarding a construction company which is suspected of having manipulated this whole incident.”

In addition, a detective was pulled off the investigation team and assigned to other post. He participated in the investigation and showed dissatisfaction with the investigation in the process.

The ledges of Yoopi, which the police confiscated, show that Yoopi received on the day of the incident a total of 290.4 million won (circa. $240,000) from three companies including S, Inc. for service purposes. The companies that paid the money have made up a consortium to win the redevelopment project.

As the market for redevelopment is growing larger and more lucrative, a new breed of organized crime syndicates is booming out. They are called “Redevelopment Gangs.” They are hired by construction companies, and in return do every illegal thing in the book including threatening and beating.

These gangs register themselves as consulting firms or dismantling companies

Upon our own probe, it is known that these gangs do whatever it takes to have their “client” construction companies selected for redevelopment projects, including bribing residents, and lynching officials of the companies competing with their client companies or forcefully hindering any meeting hosted by the competing companies.

In the end, if their clients get selected to perform the redevelopment projects, one crime organization gets a contract worth 20 – 25 billion won (per 3,000 households).

The so-called dismantling companies in association with construction companies have reached 20 in number nationwide. Main gangs are Pokpo Family, Shisanh Family, Kwangjo Family and Chunjoo Ohkukri Family. In addition, as the market grows, Saemaul Family, Hama Family and Ppongah Family are also operating in Seoul.

One insider said, “It is a secret known to everyone. The construction companies hire dismantling companies and directly and indirectly have them do illegal activities that they cannot do themselves. And the cost from their association is passed onto residents and shown up in the monopoly.”