Joo Hyun Bahn, a real estate broker who is Ban Ki-Moon's nephew, and his father Ban Ki-sang, Ban Ki-moon's brother who was an executive at South Korean construction firm Keangnam Enterprises Co Ltd, were charged in an indictment filed in Manhattan federal court.
The indictment also charged Malcolm Harris, a self-described arts and fashion consultant and blogger, who prosecutors say double-crossed Bahn and his father by holding himself out as an agent of the official only to steal the bribe money.
Bahn, a South Korean national living in New Jersey, pleaded not guilty during a court hearing, where a prosecutor argued unsuccessfully against the 38-year-old's release on a $250,000 bond, calling him a flight risk.
He had been arrested earlier on Tuesday, as was Sang Woo, 35, who prosecutors said participated in the scheme while working at two New York real estate brokerages with Bahn.
Neither Harris, 52, of New York, nor Ban Ki-sang, 69, of Seoul, were arrested, prosecutors said. They could not be immediately reached for comment, Reuters reported.
The charges came after Ban Ki-moon stepped down as UN Secretary-General on Dec. 31, 2016. A former foreign minister of South Korea, Ban is expected to enter the race to become the country's next president, though he has yet to declare his intention to do so.
Yoon Won-joong, a spokesman for Ban Ki-moon, said he was "surprised" by the reports on the case and had no knowledge of the matter.