Seoul (The Korea Herald/ANN) – South Korea concluded Friday (March 25) that the recent sex scandal involving several of its officials in Shanghai and a young Chinese woman was not a case of espionage, avoiding diplomatic fallout with China which has been closely monitoring the investigations.
Several officials, including former Consul General Kim Jung-ki, underwent government investigation over allegations they leaked confidential state information to a married Chinese woman while working in Shanghai.
Deng Xinming, the 33-year-old housewife at the center of the scandal, disappeared from the public eye after news broke earlier this month, also avoiding a probe by the Seoul investigation team which had been in Shanghai last week.
We recognize this case as an incident caused by serious indiscipline of officials at overseas missions, which led to leakage of some state information, illegal visa issuances and inappropriate relationships,” Kim Seok-min, deputy minister of Seouls Prime Ministers Office, said in a news briefing.
Officials had made the mistake of conducting anomalous diplomacy relying on unofficial and inappropriate sources such as the accused Chinese woman and were found to have had inappropriate relationships at hotels in China, Kim said, adding that more than 10 related officials will be punished.
Deng appears to have approached the Korean officials mainly for help with visa issuances. About 19 state documents did leak via the Shanghai mission, but none of them are considered information that calls for legal action, the Prime Ministers Office said.
Korean officials at the Shanghai mission were initially suspected of passing classified government files to Deng, which were said to include contact information of some 200 high-ranking Korean officials and the schedule of President Lee Myung-bak.
When the scandal was first reported earlier this month, some speculated that Deng was an A-class spy hired by her government, citing her wealth and way of dealing with men.
The Chinese government expressed regrets about Seoul turning the incident into a spy case, its main newspaper warning of negative effects on Seoul-Beijing ties unless the case was quietly dealt with in an editorial.
After the government investigation results were made public, the Foreign Ministry said it would sternly deal with the officials involved, including former consular chief Kim.
The ministry also said it would conduct stricter inspection of its officials at overseas missions and recall anyone with disciplinary problems.
The latest scandal was unveiled shortly after the Foreign Ministry announced a set of reform measures to overcome a nepotism scandal that led to the resignation of its minister, dealing another blow to the ministry often considered an organization of elites.
NEW YORK (Reuters) – Galleon hedge fund founder Raj Rajaratnam, the central figure in the biggest U.S. insider trading case in a generation, went to trial on Tuesday in a showdown with prosecutors that will feature wiretap evidence and the testimony of former friends and associates.
Onetime billionaire Rajaratnam, 53, was mobbed by photographers and TV crews when he stepped from a black suburban SUV and walked into Manhattan federal court. Dressed in a brown coat and a suit, he was escorted by one of his lawyers.
He sipped black coffee in the courthouse cafeteria, declining to comment to reporters. He then went to the courtroom where about 150 potential jurors were to be questioned by U.S. District Judge Richard Holwell.
Opening statements will start once the 12-member panel is in place for a trial expected to last up to two months.
Rajaratnam is the former head of Galleon Group, which once managed $7 billion. He could face a 20-year prison sentence if convicted on the most serious charge of securities fraud.
Since arresting Rajaratnam in October 2009 and announcing criminal charges against 26 former traders, executives and lawyers, the U.S. government has pressed ahead with what it calls the biggest probe of insider trading in the $1.9 trillion hedge fund industry.
Prosecutors allege Sri Lankan-born Rajaratnam made $45 million in illicit profits through tips from former friends and associates. Nineteen people have pleaded guilty in the case, which stands apart from past insider trading probes because of the government’s wide-scale use of phone taps.
A questionnaire asks potential jurors more than 50 questions aimed at weeding out potential bias against the financial industry and concerns about the economic crisis.
The case “does not have anything to do with the recession or who is to blame for the financial problems we face,” the questionnaire reads.
It goes on to ask, “Does the fact that the case involves the financial industry, Wall Street executives, hedge funds, mutual funds and the like, make it difficult for anyone to render a verdict?”
It is not known whether Rajaratnam will testify in his own defense after the jury has heard hours of tapes and testimony from as many as six cooperating witnesses. Prosecutors say they could present up to 173 recordings of telephone conversations.
Among those who could be called by the government to testify is Lloyd Blankfein, chief of Goldman Sachs Group Inc., according to published reports.
Prosecutors and regulators have accused former Goldman board member Rajat Gupta of leaking information about the bank to his friend Rajaratnam, but Gupta has not been criminally charged.
Rajaratnam’s chief defense lawyer, John Dowd, has fought hard for his wealthy client, arguing that prosecutors have broadened the definition of insider trading. A money manager’s liberty should not be at risk because he trades on a stock while knowing something about the company, Dowd argues.
He also fought, unsuccessfully, to suppress the FBI’s secretly recorded phone conversations from trial.
The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
(Additional reporting by Basil Katz)
(Reporting by Grant McCool, editing by Dave Zimmerman)
CEDAR RAPIDS, IA (CNN) – Some employees at a medical clinic in Iowa claimed a supervisor used a baby monitor to eavesdrop on them.
According to a labor representative for the University of Iowa medical clinic employees, workers found the monitor sitting on a shelf near the reception area.
The employees think the monitor was placed there to pick up the conversations of five secretaries and clerical workers.
“If that monitor was there for even one day, that’s the potential for 100 HIPPA violations if that thing was being monitored the whole time, and that’s pretty egregious,” said union rep Jon Stellmach.
Managers of the office say the monitor was used to see if staff members were talking too much.
The supervisors say the monitor was removed after workers complained, and University of Iowa officials say the case is being handled by the human resources department.
A court-martial for a 22-year-old Navy sailor charged with attempted espionage while he was stationed at Fort Bragg has been set for May 19.
Navy Reserve Intelligence Specialist Petty Officer 2nd Class Bryan Minkyu Martin of Mexico, N.Y., is accused of attempting to sell classified documents to an undercover FBI agent in November shortly before he was set to deploy to Afghanistan in support of the Army.
Martin enlisted in the Navy in 2006 and received a top secret-level security clearance the following year.
He has been charged with four counts of attempted espionage and 11 counts of mishandling classified information. Martin’s attorneys did not enter a plea at an arraignment hearing Thursday at Naval Station Norfolk, where he is being held in the brig. They also did not immediately decide whether to have Martin’s case decided by a judge or jury.
According to a warrant, Martin accepted a total of $3,500 from an undercover agent in exchange for dozens of pages of documents that were classified as either secret or top secret.
A Clayton County grand jury indicted a sheriff’s deputy Thursday on charges of invasion of privacy and obstruction of a law officer.
Alicia Parkes is accused of using a recording device to eavesdrop on another employee in a restroom late last year. In a separate 2008 incident, she is also accused of trying to prevent a police officer from arresting one of her relatives after Parkes called 911 emergency services. At the time of that incident, Parkes worked for the Clayton County Police Department.
If convicted, Parkes faces one to five years in jail and possible fines. About a half-dozen witnesses testified before the grand jury Wednesday. Parkes allegedly admitted during an internal affairs investigation to making the recording, according to testimony given during the grand jury hearing.
“It’s always a sad day when a law enforcement officer is indicted because it creates a little bit of a stain on all of us,” Sheriff Kem Kimbrough said Friday. “But we have an obligation to reserve final judgement on her until the court process works its way through.”
Parkes no longer serves as public information officer for the sheriff’s department, Kimbrough said. She is still employed by the department but is on administrative leave until Monday when Kimbrough said he will decide on her future with the department.
Parkes is expected to turn herself in, officials said. Parkes’ attorney, Ricky Morris, was unavailable for comment.
