'Fake Oil Production and Tax Evasion'... Gyeonggi-do Cracks Down on Illegal Distributors

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered a large number of operators illegally distributing petroleum products, including a chartered bus travel operator who made counterfeit petroleum by mixing kerosene and diesel supplied from gas stations and used it as vehicle fuel, and an organization that evaded taxes by conducting undocumented transactions through figurehead managers and then closing their businesses.

Gyeonggi Province announced on the 28th that from February to June this year, it conducted joint crackdowns with the Korea Petroleum Management Service to establish a fair petroleum distribution order and create an environment where residents can refuel with confidence, resulting in the apprehension of 10 individuals. Among them, 6 were referred to the prosecution, and 4 were criminally charged and are under investigation.

The types of violations detected include ▲ illegal manufacture and use of counterfeit petroleum products and unauthorized storage of hazardous materials (1 person) ▲ unregistered petroleum business operators and undocumented transactions leading to unfair profits and tax evasion (6 persons) ▲ illegal storage and use of diesel and gasoline from scrapped vehicles (1 person) ▲ illegal trade of petroleum compounds between solvent retailers (1 person) ▲ illegal sale of kerosene as fuel for dump trucks (1 person).

In a specific case, Mr. A, a chartered bus travel operator, installed his own fuel storage facilities and fuel dispensers at his garage without permission. He received 22,000 liters of kerosene and diesel worth approximately 31 million KRW from gas stations and manufactured 537 liters of counterfeit petroleum, which he used as fuel for his chartered buses. Mr. A was caught during a special investigation for storing the remaining counterfeit petroleum without hazardous material permits.

Counterfeit petroleum can damage key vehicle components, potentially causing major accidents, and is a factor in environmental pollution due to harmful gas emissions.

Mr. B operated gas stations using figurehead managers Mr. C and Mr. D, receiving petroleum through undocumented transactions. They ran their business for about six months before closing, earning unfair profits of 3.1 billion KRW and evading taxes of 470 million KRW. They established a nationwide network of gas stations conducting undocumented transactions, centered on M Gas Station in Gyeonggi Province and P Gas Station in Incheon, repeatedly opening and closing businesses to cleverly evade tax authorities’ surveillance.

Additionally, petroleum sellers Mr. E and Mr. G were caught for failing to report supply situations to the Korea Petroleum Management Service and supplying 910,000 liters of petroleum through undocumented cash transactions to unregistered operators, generating unfair sales of 1.4 billion KRW and evading 73 million KRW in taxes.

Mr. H, while handling vehicle scrapping, extracted 3,300 liters of diesel and gasoline remaining in scrapped vehicle fuel tanks by connecting a hose to the fuel line, then illegally used the fuel stored in 200-liter drums and 20-liter containers, leading to his capture.

Furthermore, petroleum seller and gas station operator Mr. J was caught on-site for illegally selling 61,000 liters of kerosene?not diesel?as fuel to 14 dump trucks at a construction site, disguising the business as closed.

Under the current "Petroleum and Petroleum Substitute Fuel Business Act," those who manufacture, store, or sell counterfeit petroleum face imprisonment of up to five years or fines up to 200 million KRW. Those involved in undocumented transactions or selling kerosene as fuel face imprisonment of up to two years or fines up to 50 million KRW. Violating businesses may also face administrative sanctions such as business suspension, fines, or closure of business premises by the competent authorities.

Kim Young-soo, head of the Gyeonggi Province Special Judicial Police Unit for Fairness, emphasized, "Illegal distribution of petroleum products causes vehicle safety accidents and environmental pollution through harmful gas emissions, harming public health and causing losses to national tax revenue. We will continue to conduct on-site crackdowns on the petroleum distribution industry in cooperation with the Korea Petroleum Management Service and focus our investigative capabilities to establish a proper distribution order."

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