Northrop Sues Ex-Aide Over S. Korean Deals

Aerospace contractor Northrop Corp. is suing Honolulu businessman James Shin to recover $6.25 million allegedly paid to him and several South Korean associates.

According to the suit filed Friday in U.S. District Court here, the money paid from 1984 to 1986 was to assist “Northrop’s business activities in Korea.”

The Los Angeles-based manufacturer also has filed a civil lawsuit in South Korea to recover the money Northrop says was to have financed construction of a hotel and office complex in Seoul. The hotel was never built and the money, paid into a Korea Exchange Bank account in Hong Kong, disappeared.

U.S. government investigators say the money may be part of about $7.75 million allegedly paid by Northrop to help sell its ill-fated F-20 fighter jet. The payments are being investigated by a federal grand jury in Los Angeles, by a U.S. congressional committee and by the government of South Korea.

$1-Million Check

The federal investigators are trying to determine whether the Northrop payments violated the U.S. Foreign Corrupt Practices Act.

Reporters have not been able to reach Shin, 51, the former operator of a Honolulu nightclub, for comment.

Northrop’s suit alleged that Shin secretly received a $1-million check from the Hong Kong bank account in August, 1984.

In a divorce case filed against Shin last April, his wife said Shin had been employed as an overseas aircraft sales consultant for Northrop at a salary of $8,500 a month, plus expenses.

The Northrop suit says Shin was hired in April, 1983, “as a consultant and adviser in support of Northrop’s business activities in Korea.”

In 1984, the suit says, “Northrop began considering an investment in a joint venture with Asia Culture Travel Development Co., a Korean corporation.”

Photocopy surfaces

The suit says Shin participated in discussions for Northrop, and the two sides agreed to build a hotel and office complex in Seoul to assist Northrop’s marketing efforts in Korea.

Asia Culture was controlled by Chong Kyu Park, a politically well-connected South Korean who once served as chief bodyguard to the president of South Korea.

In August, 1984, 20 days after Northrop put $6.25 million into the Hong Kong bank account of Asia Culture, Shin received a $1-million check drawn on the account and concealed it because it was a conflict of interest, according to the Northrop suit.

Northrop learned of the $1-million check in March, 1988, when a photocopy surfaced in Northrop’s civil fraud lawsuit in South Korea, according to the suit here.

Northrop’s relationship with Shin is believed to have ended in early 1987.