The fortuneteller, Suriyan Sujaritpalawong, known by the name "Mor Yong," died of a blood infection Saturday at the military prison where he had been detained since mid-October, the Justice Ministry said.
Mor Yong was known as a celebrity fortuneteller popular with officialdom and the Thai elite, and his death sparked immediate skepticism on social media about why authorities waited two days to reveal his death.
The military regime that ousted an elected civilian government last year has declared that defense of the monarchy is its priority, and it has vigorously pursued prosecutions under the law, trying such cases in military courts. Lese majeste, or insulting the monarchy, is punishable by three to 15 years in prison.
The Corrections Department said in a statement that a guard found him unconscious in his cell bed Saturday night and sent him to the prison hospital, where he was pronounced dead.
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An autopsy identified the cause of death as septicemia, which is also known as sepsis and is a life-threatening condition that can occur from bacteria in the blood.
The announcement of the death came two weeks after a senior police officer also implicated in the case allegedly hanged himself while in custody.
Police say they are seeking more suspects, and Thai media have been filled with unconfirmed reports of high-ranking military officials under suspicion.
The case focuses on sponsorship of mass biking events arranged to honor Thailand's king and queen and accuses the suspects of allegedly seeking kickbacks and other benefits in connection to the events.
Police corruption is a long-standing problem in Thailand, but it rarely has involved charges of lese majeste.