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Korea, U.S. seek joint probe of Yoo’s alleged tax evasion

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Published : 2014-07-17 20:59
Updated : 2014-07-27 15:50

Tax authorities in South Korea and the United States will conduct a joint investigation into the allegation that the fugitive Yoo Byung-eun’s family engaged in offshore tax evasion.

After the April 16 Sewol ferry disaster, the National Tax Service asked its U.S. counterpart to share intelligence on Yoo, the de facto owner of the sunken vessel, over his alleged dodging of taxes at home and abroad.

The U.S. tax agency has recently expressed its willingness to collaborate with the Korean authority in the investigation, NTS officials said Thursday.

Officials said the two authorities are determining the targeted properties owned by the 73-year-old Yoo’s family in the U.S. and the duration of the joint probe.

The properties held by Yoo, his children and his companies are estimated to be worth a total of 14.5 billion won ($14.2 million). His companies consist of units of Chonghaejin Marine Co., the operator of the ill-fated Sewol.

The targeted real estate may involve land in Riverside County, California, a house in New York State and an apartment in Manhattan. The properties are reportedly owned by Yoo’s children, including his second son Hyuk-kee, who is known as Keith H. Yoo in the U.S.

Yoo’s family also reportedly owns a plantation in the United States called 123Farm, one of the largest organic lavender farms in California, which was started in 2001 at Highland Springs Resort, a property consisting of a 56-room hotel, conference center and restaurants.

Yoo Byung-eun was chairman of the board of the company that bought the resort in the 1990s for $6.7 million.

Dapanda, a subsidiary of Chonghaejin Marine, holds a 9.9 percent stake in the Highland Springs Conference and Training Centre at the resort, according to Yoo’s business group’s regulatory filings.

A tax agency official said the coming joint probe will pave the way for the government to confiscate the illicitly raised wealth of Yoo’s family by tracing the flow of slush funds, embezzlement and possible money laundering.

Meanwhile, though their illicitly gained wealth is estimated to reach 240 billion won at home and abroad, including assets allegedly under borrowed names, the tax investigators and prosecutors’ initial target ― filed with the court ― stood at 16.1 billion won in bank deposits and stock market capitalization, which were verified through real-name accounts.

The ultimate target of 240 billion won includes an estimated 129.1 billion won held by Byung-eun, 49.2 billion won by his daughter Seom-na, 5.6 billion won by the 73-year-old business tycoon’s oldest son Dae-kyoon and 55.9 billion won by his second son Hyuk-kee.

By Kim Yon-se (kys@heraldcorp.com)