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Tax man arrested in alleged bribery case involving wife

Published: 18 Nov. 2009, 22:21

Prosecutors yesterday arrested a senior tax official surnamed Ahn who allegedly pressed companies to buying expensive artwork at his wife’s gallery in return for dropping tax probes.

Prosecutors are questioning Ahn about why his wife’s Gaain Gallery sold art at inflated prices to companies between 2006 and 2008 when those companies were under investigation by tax officials. They also want Ahn to explain if he illegally altered those investigations after the companies bought art at the gallery in Pyeongchang-dong, Jongno District, Seoul.

Prosecutors said they will question Ahn for 48 hours, the maximum time limit before a detention warrant is required under Korean law. They said they will seek a warrant to detain him today. Ahn’s wife, surnamed Hong, will be summoned soon, prosecutors added.

During a raid of the gallery earlier this month, prosecutors obtained documents that contain lists of companies and names of their officials that purchased art from the Gaain Gallery.

Both Ahn and his wife have been banned from overseas travel.

Prosecutors later summoned several company officials. Among them was a man surnamed Bae, the CEO of construction company “C.” Bae’s company purchased 2.7 billion won ($2.3 million) worth of art from the gallery, according to prosecutors.

Bae has denied allegations that he was forced to buy the art. But prosecutors obtained testimony from a tax official that he received a phone call from Ahn when he was conducting a probe into Bae’s company. The official said Ahn asked him to limit investigation into the company. In January, the National Tax Service suspended Ahn from his position and placed him on a waiting list for working at the NTS overseas branch in the U.S. after an art scandal involving former National Tax Service Commissioner Han Sang-yool broke out in January.

Han, who become the National Tax Service head in December 2007, stepped down after it was alleged that he offered a 35 million won painting called “Hakdong Maeul [Hakdong Village]” by the late Korean artist Choi Wook-kyung to then-National Tax Service commissioner Jun Gun-pyo, his predecessor. Han flew to the United States in March 2009 and hasn’t returned.

Jun was arrested while in office in December 2007 on bribery charges. Jun’s wife, Lee Mi-jung, then put the painting up for auction at the art gallery belonging to Ahn’s wife to cover her husband’s legal expenses.

The scandal captured media attention when Jun’s wife disclosed in January this year that she actually received the painting from Han’s wife in order to win a promotion for her husband.

The NTS audit team suspected Ahn’s wife worked with Jun’s wife in disclosing the bribery and that Ahn was behind the disclosure. Ahn served as the chief at the Seoul Regional Tax Office’s inspection Division I in 2006, the head of Daegu Regional Tax Office in 2007 and the chief of tax resource and management division at the Seoul Regional Tax office in 2008. Before Ahn was arrested, he reportedly told an acquaintance that he will take legal action against the National Tax Service for “illegally pressuring him.”

By Kim Mi-ju, Park Yu-mi [[email protected]]