The prosecution has reportedly questioned the daughter and the widow of the late President Roh Moo-hyun on suspicion of violating the Foreign Exchange Control Law and creating a slush fund to buy pricy real estate in the U.S.

The two are likely to be called in as both have reportedly denied the allegations.

According to the central investigation team of the Seoul Central Prosecutors’ Office, former first lady Kwon Yang-sook and Roh Jeong-yeon turned in their written answers on Monday, detailing Roh’s attempt to buy a high-end apartment in New Jersey in 2009.

Roh admitted that she sent about 1.3 billion won ($1 million) to Kyung Yeon-hee, who promised to sell her the Hudson Club complex apartment for $1.6 million. The contract was made void since Roh failed to pay the remainder.

Roh has reportedly said she wasn’t involved in the alleged illegal foreign exchange. She instead has reportedly blamed her mother, Kwon, for all the irregularities, claiming the money came from Kwon and that it is her mother who knows the exact source of the funds.

But Kwon has remained tightlipped, saying she knows nothing about the money.

Roh and Kwon’s statements came after the investigation into suspicions surrounding Roh resumed in May. Kyung was summoned by the prosecution and has reportedly said that she had received boxes with $1 million in cash from two men on behalf of Roh Jeong-yeon and transferred it through a broker.

Prosecutors believe the transaction could have violated the Foreign Exchange Control law. They also apparently suspect the money may have come from the much-rumored slush fund created by the former president, collected from businessmen as kickbacks.

The prosecutors said they might have to summon the mother and daughter if identification of the source proves unsuccessful.

By Bae Ji-sook (baejisook@heraldcorp.com)