Police raid Tax Service amid Samsung probe

Police raided the National Tax Service’s Seoul regional branch on Friday in Jongno District, central Seoul, to search for evidence that Samsung’s chairman hid his fortunes in a slew of bank accounts opened under borrowed names, possibly to evade taxes or embezzle company funds.

The move came on the heels of a newly formed investigative team in the ruling Democratic Party, namely the “Lee Kun-hee False Name Bank Account Task Force,” which accused prosecutors of having intentionally left out many of Lee’s suspicious bank accounts in 2008 during a special probe held in the conservative Lee Myung-bak administration.

Police said they recently acquired testimony from a Samsung official that he reported the mogul’s bogus bank accounts to the tax authority’s Seoul branch in 2011. The accounts were said to be made under the names of Samsung executives, but actually belonged to Lee and his close family members.

Rep. Min Myung-doo, a member of the Democratic Party’s task force team, warned Samsung “won’t be able to escape from liability” if it does turn out Lee tried to hide his money, urging police to share their findings with the public.

“The administration has changed. The National Tax Service will no longer get away with turning a blind eye to chaebol crimes,” said Min. “The future of Korea’s economy will only be dour if we don’t correct chaebol families’ immoral ways of running their businesses.”

Min called on police to “root out accumulated evils of the past” and thoroughly review the prosecutions’ probe in 2008 for any loopholes.

The owner of Korea’s most profitable and powerful conglomerate, Lee has been hospitalized since May 2014 after suffering from a heart attack, but is still considered one of the wealthiest people on the planet.

Bloomberg estimated last month Lee owned some $22.2 billion, making him the 37th richest person in the world, the only Korean national to make it into the top 100. Lee rose from 86th place last year, due in part to the surge in stock value of Samsung Electronics.

The chairman’s son, Lee Jae-yong, was sentenced to five years in prison last August for having bribed former President Park Geun-hye in return for business favors, to which his lawyers appealed.

The accusations surrounding Lee’s fake bank accounts rose last October, when Rep. Park Yong-jin of the Democratic Party claimed the Samsung chairman violated the country’s Act on Real Name Financial Transactions and Guarantee of Secrecy by stashing money under his aides’ names.

The Financial Services Commission said it would look into the allegation, and if Lee does turn out to have committed the transgression, it said it will hit him with higher taxes.

BY KIM MIN-SANG [lee.sungeun@joongang.co.kr]