The prosecution said Thursday that it has launched an internal investigation into a judge involved in a suspicious money transaction with a loan shark.

The judge, who works at a district court in Suwon, Gyeonggi Province, is suspected of borrowing 600 million won ($577,000) from a private money lender surnamed Choi. It is unknown how the deal was carried out and whether the money was transferred to the judge in exchange for favors.

The probe was launched after the Supreme Prosecutors’ Office obtained information about the judge’s alleged misconduct. The top prosecutor’s office said it handed over the case to a Seoul district court. The prosecution is likely to investigate whether the money was given to the judge as a bribe.

The judge denied the allegations.

“The accusations are not true. I will not hesitate to take legal actions against media that do not publish a correction, for causing severe damage to the court’s reputation,” the judge said in a statement on Wednesday.

According to the prosecution, the SPO’s regional office in Daegu was first informed about the case by an unidentified man who had claimed that the judge had received 300 million won in 2008 to pay for his deposit to lease an apartment.

The informant also told the officials that a loan shark had given the judge an additional 300 million won in 2009, which he used for a stock investment.

Court officials defended the judge’s allegations and said the police have already closed the case.

“We express concerns over the rumor, which could deal a major blow to the public trust in the judiciary,” the top court said in its statement.

The judge reportedly told the top court that he had “received 300 million won from an acquaintance in the past, but it was not Choi.” The top court officials said the judge claimed he has not from lent or borrowed money from anyone before or after the case.

But fresh accusations are being made by local media that the judge received at least 800 million won from the lender.

According to the local newspaper Hankook Ilbo, the judge received money on three different occasions. The report added that police secured the evidence and summoned people implicated in the case during its yearlong investigation.

By Suk Gee-hyun (monicasuk@heraldcorp.com)