Hanjin smuggling trio referred to prosecutors

The Korea Customs Service asked the prosecution to indict the Hanjin Group matriarch and her daughters on charges of smuggling goods including luxury items from overseas Thursday after an eight-month long investigation.

It is the first time Lee Myung-hee, the wife of Hanjin Group Chairman Cho Yang-ho, and the group’s two infamous heiresses Cho Hyun-ah and Cho Hyun-min, known for turning to nuts and drinks respectively as weapons of choice in fits of rage, have been sent to the prosecution on smuggling charges.

Incheon Main Customs, a branch of the customs agency, said members of the Hanjin Group owner family used airplanes and workers of the group-controlled airline Korean Air to smuggle their personal goods.

The goods they imported without paying customs taxes since April 2009 through May amount to 150 million won ($134,000), according to the customs agency. They were found to have smuggled 1,061 items including luxury goods and daily supplies on 260 separate occasions.

The family also falsely declared the purchaser of 132 items like furniture and bath tubs as Korean Air. The items purchased in 30 different occasions from January 2013 through March 2017 are worth roughly 570 million won.

Along with the three members of the owner family, two Korean Air employees who were actively involved in the smuggling process were also sent to the prosecution.

When Cho Hyun-ah ordered goods from an overseas online shopping mall to be delivered to a Korean Air branch office, the office would load the items onto the airline’s planes through cabin crew or as checked luggage. The items were imported as if they belonged to Korean Air and weren’t reported to customs. The items were eventually delivered to Cho with the help of the two employees.

Lee asked employees at Korean Air’s overseas branches to purchase local fruits and tableware so that the products could be delivered through the airline’s planes. The items were also labeled as the property of Korean Air.

As Lee and Cho Hyun-ah falsely reported some of the goods they purchased as products bought by Korean Air, the company also had to pay 220 million won in customs tax and transport fees.

In Korea, smuggling can result in a jail sentence of five years or less or fines of 10 times the customs tax evaded or the total cost of the goods smuggled, whichever is larger. For falsely declaring who purchased the items, fines typically equal the total cost of the goods falsely declared or 20 million won, whichever is larger.

“The owner family has not been supportive of our investigations,” said an official from the Incheon Main Customs. “We spotted signs of the family trying to destroy evidence, and they did not comply with our request for information.”

The official added that “while there were many items that were estimated to be smuggled goods when we raided [the suspects’ office and residence] they kept on saying they were bought domestically or were gifts from somebody else but failed to prove that by submitting evidence like purchase receipts.”

According to the official, the investigation took a long time because they had to summon a large group of people including the Hanjin Group owner family and Korean Air workers, including those from the airline’s foreign branches and customs office employees.

Korea’s customs authority said that it has also examined the possibility of ties formed between customs office employees and the airline, adding that it has already disciplined customs office workers who handled customs processes carelessly on goods delivered by Korean Air.

A spokesperson from Korean Air on Thursday said the company has “fixed the work system so such smuggling can no longer happen internally.”

BY KIM JEE-HEE, SUH YOU-JIN [kim.jeehee@joongang.co.kr]