41 Million KRW Delinquent Loan Shark Hides '43.8 Billion KRW Check'... 623 People with 81.2 Billion KRW Delinquency Detected

Seoul City 38 Tax Collection Division Conducts First Check on High-Value Tax Delinquents' Check Exchanges... Data Obtained from 10 Major Banks Leads to Detection
Additional Investigation Underway on Check Exchange Records from 586 Secondary Financial Institutions Including Saemaeul Geumgo, Credit Unions, and Savings Banks
Through 28 Securities Firms, Stocks Worth 103.8 Billion KRW Confirmed for 380 Delinquents, with Immediate Seizure of 284 Individuals' Assets

[Asia Economy Reporter Lim Cheol-young] #Delinquent taxpayer Mr. A is a private moneylender who has been delinquent on 36 cases including automobile tax totaling 41 million KRW since December 2002. From 2019, over two years, he exchanged cashier's checks worth 43.8 billion KRW. Mr. A appeared at the Seoul City 38 Tax Collection Division for investigation and provided 150,000 virtual currency coins held under a friend's name as tax payment collateral.

#Delinquent taxpayer Mr. B voluntarily visited the 38 Tax Collection Division on the day Seoul City seized 5.6 billion KRW worth of 56 stock items and paid the delinquent tax of 24 million KRW in full on the spot.

On the 28th, Seoul City’s 38 Tax Collection Division announced that it had identified 623 high-value delinquent taxpayers who concealed assets by exchanging large amounts of cash into cashier's checks without paying their delinquent taxes. Over the past two years, these individuals exchanged 171.4 billion KRW into cashier's checks 13,857 times but did not pay their overdue taxes. The assets they concealed amounted to twice their delinquent tax of 81.2 billion KRW.

Last month, Seoul City took the nationwide first step among local governments by seizing virtual currencies concealed by high-value delinquent taxpayers and has since begun investigating and seizing financial assets such as cashier's checks and stocks. This is the first investigation into the actual status of cashier's check exchanges. The investigation found 99 delinquent taxpayers who exchanged cashier's checks worth over 100 million KRW, with the total exchange amount reaching 162.7 billion KRW. This accounts for 94% of the total cashier's check exchange amount of 171.4 billion KRW. Their delinquent tax amounted to 26 billion KRW.

An official from the 38 Tax Collection Division explained, "Seoul City obtained the cashier's check exchange records of high-value delinquent taxpayers over the past two years through 10 commercial banks and sent summons for investigation to the delinquent taxpayers. We took seizure actions on assets confirmed through investigations and home searches."

Among the identified delinquent taxpayers, 74 paid 1.3 billion KRW in delinquent taxes, and promises to pay and provision of tax payment collateral continue. Seoul City suspects similar cases exist in the secondary financial sector and is conducting additional investigations into cashier's check exchange records from 587 financial institutions including Saemaeul Geumgo, credit unions, and savings banks.

Additionally, Seoul City tracked stocks held by high-value delinquent taxpayers through 28 domestic securities firms. The tracking confirmed that 380 delinquent taxpayers (with delinquent taxes of 62 billion KRW) held 103.8 billion KRW in 974 accounts, including evaluated stock value and deposits. Seoul City immediately seized 81.8 billion KRW in evaluated stock value and 2.4 billion KRW in deposits from 284 taxpayers across 718 accounts (covering 1,925 stock items).

Seoul City plans to proceed with sales or collection if delinquent taxpayers evade tax payments despite seizure and encouragement to pay after seizing stocks and other investment products and deposits. When Seoul City requests the securities firms to sell the seized stocks, the sale will be conducted based on the simultaneous bid price on the opening day following the sale request date.

An official from the 38 Tax Collection Division stated, "We received information about high-value delinquent taxpayers who have the economic capacity to pay taxes but conceal assets by exchanging them into cashier's checks or invest in financial products such as stocks to increase their assets during a stock market boom, and conducted investigations. Since the seizure of investment products and deposits began, high-value delinquent taxpayers fearing trading restrictions have promptly paid their delinquent taxes or requested to postpone forced stock sales."

Seoul City plans to convert suspected cases of tax evasion or asset concealment under local tax laws into criminal cases, conducting interrogations, seizures, and searches followed by prosecution. In particular, those found to have conducted transactions under false names during the investigation will be prosecuted for violating the Real Name Financial Transaction Act. Violations of this act carry severe penalties, including imprisonment of up to five years or fines up to 50 million KRW.

Lee Byung-han, Director of Seoul City’s Finance Bureau, emphasized, "Recently, financial assets have been used as means for high-value delinquent taxpayers to conceal assets. Following virtual currencies, we swiftly secured data on cashier's check exchanges and investment product holdings such as stocks and took seizure actions. We will relentlessly pursue unscrupulous high-value delinquent taxpayers who deliberately conceal assets and evade payment despite having the economic ability to pay taxes, ensuring tax justice through collection."

This content was produced with the assistance of AI translation services.