State prosecutors on Tuesday raided the residence of former National Tax Service Commissioner Jeon Goon-pyo and its Seoul regional office as part of their investigation into allegations that Jeon received bribes from CJ Group.
He has been banned from leaving the country pending the investigation and is expected to be summoned soon.
Jeon, who served as the NTS chief from July 2006 to November 2007, is alleged to have received illegal money and a high-end watch from CJ Group chairman Lee Jay-hyun in return for shielding the group from tax inspections.
The prosecutors investigating the case are said to have obtained testimony from Lee and other CJ officials that Jeon and former NTS deputy chief Hur Byung-ik were bribed to avoid audits.
After raiding the Seoul regional office of the NTS in central Seoul, a team of prosecutors and investigators of the Seoul Central District Prosecutors’ Office obtained records of a tax audit into Lee.
The disgraced chairman has been accused of transferring wealth to his two children by purchasing bonds overseas without paying gift taxes here, according to prosecutors.
The prosecutors’ office also ransacked Jeon’s home in southern Seoul to secure financial documents and data deemed helpful in proving that the former NTS commissioner received bribes from CJ Group in late 2006.
In 2006, the Seoul branch of the NTS is said to have secured evidence to collect taxes in excess of 350 billion won ($315 million) from the group. However, no additional taxes were levied on the conglomerate in that year.
Lee is currently under detention on multiple charges, including embezzlement and tax evasion, the evidence for which emerged during the investigation into his slush funds.
Along with Lee, CJ Global Holdings vice president Shin Dong-ki has been indicted on similar charges. Shin is also suspected of having managed Lee’s slush funds.
Acting on orders from Lee to bribe tax officials, Shin sought out Hur in 2006. Hur is said to have close ties with Jeon as the two are of the same age and both come from Gangneung in Gangwon Province.
The prosecution, however, suspects that Hur took the initiative in demanding money from the group, saying that money was required for the confirmation hearing for the NTS chief’s post in that year.
Shin is reported to have told the investigators that he gave Hur a black bag containing $300,000 at his office in central Seoul. Soon after, the two CJ Group executives and the two former NTS officials are alleged to have met at a hotel in Seoul, where Hur was given two luxury watches as an inauguration gift for Jeon.
Jeon has flatly denied such allegations, saying that he will explain everything during a prosecution probe.
Hur has admitted to being involved in the process, but is denying that he received any money or gifts for himself.
(From news reports)