SEOUL, South Korea — One of South Korea’s most notorious fugitives was arrested in the United States this week on embezzlement charges at home stemming from the 2014 sinking of a ferry that killed more than 300 people, many of them high school students.
Yoo Hyuk-kee, 48, was arrested on Wednesday without incident at his home in Westchester County, N.Y., in response to an extradition request that South Korea submitted to the United States, a Justice Department spokeswoman said.
Mr. Yoo’s arrest ends a prolonged mystery over the whereabouts of the man South Korean investigators consider to be a central figure in the scandal surrounding the ferry’s sinking, which traumatized the nation. Prosecutors have said that rampant embezzlement by the Yoo family helped create unsafe conditions and practices on the Sewol ferry.
Mr. Yoo, also known by his English name, Keith Yoo, is a son of Yoo Byung-eun, whose family controlled the Chonghaejin Marine Company, the operator of the Sewol. The overloaded ferry capsized off the southwestern tip of South Korea in April 2014 in the country’s worst disaster in decades.
Prosecutors later said that members of the Yoo family embezzled $169 million from a church that its patriarch helped found and from companies, including Chonghaejin, that were run with church funds and with loyal church members installed as business executives.
By diverting money, which could have been used for safety measures, the family contributed to its sinking, prosecutors said. They also said that the ferry operator had routinely overloaded its ships, including the Sewol, in part to help make up for the losses incurred by the family’s embezzlement. On its last journey, the Sewol was carrying twice as much cargo as it was allowed.
The investigation led South Korea to conduct its largest-ever manhunt for the family members.
The senior Mr. Yoo was found dead in an apparent suicide. His eldest son, Yoo Dae-kyoon, spent two years in prison for illegally taking nearly $6.8 million since 2002 from seven companies controlled by his family, including the Chonghaejin company. Other relatives and company executives were also convicted on embezzlement and other criminal charges. The captain of the Sewol, who abandoned ship early in the crisis, is serving a life sentence for murder for his irresponsible handling of the disaster.
But Yoo Hyuk-kee, the patriarch’s second son and once considered the likely heir to his father’s religious and business empire, had been elusive.
He had previously been spotted in the United States, and was known to have owned property in Westchester County. The South Korean authorities asked the U.S. Justice Department for help in apprehending him for eventual extradition.
Mr. Yoo was accused of conspiring with chief executives of the companies controlled by his family to defraud the businesses of $23 million through such sham contracts as “fraudulent” trademark licensing and business consulting agreements, Derek Wikstrom, an assistant U.S. attorney in the Southern District of New York, said in the unsealed complaint against Mr. Yoo.
Mr. Yoo was “the de facto leader of the church” and held a fifth of the holding company through which his family controlled businesses linked to the church, the complaint said.
Mr. Yoo’s arrest on Wednesday was executed by the U.S. Marshals Service, Nicole Navas Oxman, a Justice Department spokeswoman, said by email. On the same day, he appeared via videoconference in U.S. District Court in White Plains, N.Y., and remains in federal custody, she said.
The Justice Department Criminal Division’s Office of International Affairs and the United States Attorney’s Office for the Southern District of New York are handling the extradition proceedings, she added.
The Evangelical Baptist Church of Korea, which Mr. Yoo’s father helped found in the 1960s, was unaware of his arrest, Yi Tae-jong, a church spokesman, said on Thursday. Although Mr. Yoo had been an important preacher for its congregation, the church lost contact with him after he became a fugitive, Mr. Yi said.
The South Korean Ministry of Justice did not respond to a request for comment.
Choe Sang-Hun reported from Seoul and Seamus Hughes from Washington, D.C.