Gang Involved in Fabricating Sales by Issuing False Tax Invoices Worth 600 Billion KRW Faces Trial

Suspected Issuance of False Tax Invoices under Special Tax Act
4 Company Officials Detained, 11 Indicted Without Detention

Company officials involved in exchanging false tax invoices worth a total of 640 billion KRW for tax evasion and crime concealment have been brought to trial in large numbers.

The Tax Crime Investigation Division of the Seoul Northern District Prosecutors' Office (Chief Prosecutor Jeong Yuri) announced on the 16th that it had arrested and indicted Team Leader A (51) of a large corporation-affiliated information and communication company last December on charges of issuing false tax invoices under the Act on the Aggravated Punishment of Specific Crimes, and indicted six related individuals without detention.

A is accused of exchanging false tax invoices worth a total of 600 billion KRW over 1,350 times from December 2011 to June 2021 by signing false delivery contracts through a company owned by an acquaintance as a link.

Investigations revealed that when transactions with existing clients ceased, A committed these crimes to inflate sales performance and receive bonuses.

The prosecution also arrested and indicted two individuals last October, including B (55), the head of precious metals distribution who operated a precious metals company from January to July 2021, evading value-added tax on gold bar sales and manipulating sales performance with false tax invoices worth a total of 22.6 billion KRW to secure financial institution loans or sell the company at a high price, along with accomplice C (56). Another accomplice, D (52), is currently wanted after fleeing.

Four others, including cosmetics seller E (34), were indicted without detention on the 23rd of last month on charges of purchasing large quantities of duty-free cosmetics from peddlers to avoid paying value-added tax, distributing them domestically, and receiving false tax invoices worth a total of 10.4 billion KRW from paper companies from June 2021 to April last year.

They are also accused of falsifying related documents to make it appear as if the duty-free cosmetics distributed domestically were properly exported overseas.

Additionally, two officials from a sales agency were brought to trial, either detained or not, on charges including embezzling service payments made by a regional housing association and manipulating accounting documents to conceal the crime.

A prosecution official stated, "This is a case where the prosecutor’s supplementary investigation uncovered the actual crimes that were not revealed during the National Tax Service’s investigation process," adding, "We will continue to cooperate with the National Tax Service and strictly respond to tax offenders who undermine the foundation of national finances."