The defendants' filing alleges that Northrop executives began a convoluted cover-up scheme in which the firm would pay an additional $1.5 million to the bus company controlled by Park and that money would then be used partly to repay Northrop for the hotel deal.
"Walking a path of corruption, Northrop was an easy target for the disgruntled participants," the filing said. It alleges that Northrop received a letter from a shadowy Korean by the name of Kang Sae-Hi, threatening to "publish all facts" about the Northrop deal.
Lee Min Ha, Park's brother-in-law and the Korean head of the joint venture, was quoted in the filing as telling a Korean prosecutor that Northrop officials wanted the $1.5 million to be used in part "to settle the whole dispute with Kang."
The filing also quotes Charles S. Kim, a Chicago resident who was representing some of the Koreans, as telling a Korean prosecutor that former Northrop executive Donald Foulds suggested the cover-up.
Foulds' attorney, Jan Lawrence Handzlik, said: "Mr. Foulds denies having taken part in any improper activities with respect to the Korean hotel venture, much less any cover-up activities."
Northrop has denied that it undertook any cover-up. The $1.5-million payment after the hotel deal collapsed was an effort to terminate the sales representation agreement with the bus company, Northrop said.
And the company asserts in a final legal defense that "even if one assumes that some Northrop employees knowingly entered into or ratified a contract for some other illegal purpose, Northrop is still entitled to the return of its investment under Korean law."
A spokesman said Thursday that "we are still trying to recover the money that was stolen from Northrop."
A federal grand jury in Los Angeles has been investigating Northrop's Korean payments for more than a year. The grand jury has subpoenaed records from five Northrop executives, including company Chairman Thomas V. Jones. Although some attorneys close to the case have said the grand jury activities have wound down in recent months, other attorneys said indictments could be handed down before the end of the year. Northrop and Jones are still under a 1975 consent decree signed with the Securities and Exchange Commission after it was disclosed that Northrop had allegedly made $30 million in foreign payments without proper controls. A permanent injunction in that case set down strict rules governing the company's behavior.