National Tax Service Launches Special Tax Investigation into Former Lawmaker Isangjik's Tax Evasion Allegations

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kim Hyewon] The National Tax Service has reportedly launched a special tax investigation into former Democratic Party lawmaker Lee Sang-jik, the founder of Eastar Jet, over allegations of tax evasion.

According to industry sources on the 11th, the Seoul Regional Tax Office's Investigation Division 4 is conducting an investigation into allegations that Lee and his family evaded income tax, corporate tax, and gift tax. The Investigation Division 4 of the Seoul office is responsible for special (non-regular) and planned tax investigations, rather than regular tax audits.

Previously, in April last year, the Public Transport Union submitted a tip-off report to the Seoul office containing allegations of embezzlement and tax evasion by Lee. At that time, after reviewing Lee's arrest motion submitted to the National Assembly and the Eastar Jet investigation report by Anjin Accounting Corporation, the union reported that Lee and his family misappropriated and embezzled funds using six to seven companies.

The union pointed out that Lee held IMS C, which effectively controlled Eastar Jet, under a false name, transferred Eastar Jet shares to his children at a low price as an illegal gift, and used company funds from Eastar Jet and Eastar Holdings for personal purposes.

They also claimed that Lee acquired a bond worth approximately 11.8 billion won from BD International, a subsidiary of Eastar F&P, for 1 million won, and then received 6.5 billion won from BD International under the pretext of bond recovery, thereby evading taxes.

Lee, affiliated with the Democratic Party, served as a member of the 19th and 21st National Assembly but lost his seat after the Supreme Court confirmed a sentence of 1 year and 4 months in prison with a 2-year probation for violating the Public Official Election Act in May 2021.

Prosecutors are also reportedly investigating allegations of a quid pro quo involving Lee’s appointment as chairman of the Small and Medium Business Corporation and the employment of Seo, the son-in-law of former President Moon Jae-in, as executive director of Thai Eastar Jet.