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A businessman whose family’s company operated a ferry that sank off South Korea in 2014, killing more than 300 people, has been flown to that country from the United States to face embezzlement charges, officials said, after years of requests from Korean prosecutors.
The businessman, Yoo Hyuk-kee, 50, also known as Keith Yoo, arrived in South Korea on Friday morning and was taken into custody. He faces trial on seven counts of embezzlement; since 2020, he had been held without bond in New York State, where he lived for years.
A company controlled by Mr. Yoo’s family, the Chonghaejin Marine Company, operated the Sewol ferry, which capsized off the southwestern coast of South Korea in April 2014. Most of those who died were teenagers on a school trip, and the disaster traumatized the country.
The ferry was dangerously overloaded and top-heavy, and some crew members said after the sinking that they had never been trained in what to do in an emergency situation. South Korea’s Coast Guard was late to the scene and poorly prepared to help when it arrived.
Prosecutors say that members of the Yoo family embezzled $169 million from a family-run church and from companies related to their business empire. They say the thefts diverted funds that the Chonghaejin Marine Company would have spent on safety measures, thereby contributing to the ferry disaster.
But the prosecutors have not alleged that the specific acts of embezzlement with which Mr. Yoo is charged contributed to the sinking.
Shawn Naunton, the lawyer who represents Mr. Yoo in the United States, said earlier this week that he was “deeply disappointed” by the State Department’s decision to grant South Korea’s extradition request.
“This is an improper political prosecution that was launched in the days after the Sewol ferry sinking in an effort to distract the public’s attention from the failings of the government,” he said.
The Chonghaejin Marine Company was once a sprawling conglomerate with ventures that included toys, ships and cosmetics. Mr. Yoo is accused of conspiring to defraud various family businesses of $23 million through sham contracts. In a civil trial, a Seoul court in January 2020 ordered him to pay $46 million in damages to the government because he was an heir to his father, whom the court held responsible for failing to prevent the ferry’s sinking.
Between 2014 and 2019, the South Korean government asked the United States government seven times for help in apprehending Mr. Yoo, according to documents on file with the federal court system. The State Department denied the first six requests but accepted the final one, forwarding it to federal prosecutors in October 2019.
In February 2020, federal prosecutors in the Southern District of New York received an arrest warrant and a certification that he was extraditable under a treaty between the two countries, the files show.
The United States Marshals Service found Mr. Yoo at home in Westchester County, where he lived as a permanent resident with his wife and three children, arresting him on July 23, 2020. He has been detained without bail since then.
Six of the counts Mr. Yoo faces involve money he received from his family’s companies that South Korean prosecutors have called overpayment. The seventh has do to with money that Mr. Yoo spent on an art project by his father, which prosecutors characterized as embezzlement. Mr. Yoo’s lawyer says his client did significant work for the companies, and that the transaction involving his father’s art was legitimate.
Soon after his arrest, Mr. Yoo’s lawyers began working to dismiss the extradition request, first filing an unsuccessful motion in a district court, then trying again in federal court.
In November 2022, Mr. Yoo’s lawyers asked the Supreme Court to block his extradition. Justice Sonia Sotomayor denied the request the same month.
With the legal battle to stop Mr. Yoo’s extradition exhausted, Mr. Yoo’s case went before the State Department’s Office of the Legal Adviser, the division that handles extradition, Mr. Naunton said, adding that he had made several arguments to the State Department.
Mr. Naunton said he told the State Department that it was “impossible” for Mr. Yoo to get a fair trial because the South Korean government had labeled him a fugitive. In its announcement on Thursday, the Justice Ministry called him “the last overseas fugitive linked to the Sewol.”
“Keith was never a fugitive under U.S. law, under international law, or under the terms of the U.S.-South Korea extradition treaty,” Mr. Naunton said. Mr. Yoo, who moved to the United States in 1989, cooperated with prosecutors in the Southern District of New York when they looked into his finances at South Korea’s request, his lawyer added.
Mr. Yoo’s extradition concludes a major effort by the South Korean authorities to track down people connected to the Sewol sinking. Investigators were looking for his father, Yoo Byung-eun, when he was found dead two months after the ferry disaster.
Yoo Hyuk-kee’s older brother, Yoo Dae-kyoon, spent two years in prison for embezzlement.
Various other Yoo family members, as well as company executives, have been convicted on embezzlement and other criminal charges. The captain of the Sewol is serving a life sentence for murder; he and other crew members abandoned ship without instructing passengers to evacuate.
The family business has mostly disappeared, with the Chonghaejin license revoked and many assets liquidated to compensate families of the victims. However, South Korean prosecutors say they believe the family has hidden funds overseas, which they have sought to trace, so far without success.
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