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. Last Updated: 07/27/2016

Seoul Steps Up Probe Into Sakhalin Deal

SEOUL, South Korea -- Prosecutors investigating a failed oil project in Russia that led to millions in government losses raided the home Monday of a close political ally of South Korean President Roh Moo-hyun, according to a news report.

Seoul prosecutors searched 10 homes and offices, including those of parliament member Lee Kwang-jae of the governing Uri Party, Yonhap news agency reported. Lee, a former presidential aide, is closely tied to Roh.

Last year, the Korea Railroad agency paid $6.2 million to Russian investment group Alfa-Eco to invest in an oil project on Sakhalin Island.

The Russian government later denied approval and the South Korean agency withdrew from the contract, but Alfa-Eco said it would return only $2.7 million of the deposit, according to the terms of the contract.

Prosecutors conducted Monday's search after a key figure in the botched oil project told officials he gave 80 million won ($79,920) to one of Lee's aides. Lee has denied he received any money.