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Ex-tax chief faces summons

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  • Published Jul 31, 2013 4:06 pm KST
  • Updated Jul 31, 2013 4:06 pm KST

By Kim Jae-won

A former chief of the tax authorities will be summoned today over suspicions that he accepted $300,000 in cash and a luxury Swiss watch from CJ Group, in return for doing favors for the food and entertainment conglomerate during its tax audit in 2006, prosecutors said Wednesday.

The Seoul Central District Prosecutors’ Office (SCDPO) said that it notified Jeon Goon-pyo, who headed the National Tax Service (NTS) from July 2006 to November 2007, to attend its office in southern Seoul this morning for questioning.

The prosecution suspects that Jeon received $300,000 in U.S. bills and a high-end Franck Muller watch worth 30 million won from CJ in July 2006, right after he was named the tax agency’s commissioner. Investigators raided his home in southern Seoul and the tax authorities’ Seoul office on Tuesday afternoon, and collected documents related to the case.

Sources in the prosecution said that CJ Global Holdings Vice President Shin Dong-ki testified that the group gave Jeon the money and the watch through Heo Byung-yik, a former deputy commissioner of the tax agency, in a Seoul hotel. Heo was arrested by the prosecution on Saturday, suspected of taking the bribes and delivering it to Jeon.

The NTS levied no fines on the family-run conglomerate during its tax audit in 2006, though it obtained evidence that the group and Lee dodged some 356 billion won ($319 million) in corporate and income taxes, according to the prosecution.

Prosecutors have expanded their probe into the conglomerate’s alleged illegal lobbying for tax breaks after indicting CJ chairman Lee of embezzlement and offshore tax evasion charges in a separate corruption case last month.

The 59-year-old former chief of the NTS has been marred by a series of corruption scandals. In 2007, he was arrested by investigators for taking $100,000 in U.S. bills and 70 million won in cash from Jeong Sang-gon, then-chief of the tax agency’s Busan office, in exchange for promoting him.

He was sentenced to three and half years in prison and fined 79.4 million won in December 2008, but was paroled in July 2010.

In 2009, he drew attention from the prosecution again for allegedly taking a Korean painting, Hakdong Village, valued at 5 million won from former NTS chief Han Sang-ryul. Jeon was investigated by the prosecution while he was in prison and Han was indicted over the bribery allegation, but a local district court concluded that Han was not guilty.