Ex-tax chief formally arrested over bribery charges

SEOUL, Aug. 3 (Yonhap) -- An embattled former head of the national tax agency was formally detained Saturday for further questioning on allegations that he accepted massive bribes from food and entertainment conglomerate CJ Group while in office.

Jeon Goon-pyo, 59, is accused of taking US$300,000 in U.S. bills and high-end watches from CJ Group officials in exchange for favors during a tax audit into the conglomerate in July 2006, shortly after he was named the commissioner of the National Tax Service (NTS), they said.

Jeon was locked up immediately after a Seoul court approved the prosecution's request for an arrest warrant for the former NTS commissioner who was convicted five years ago for similar graft charges in the southern port city of Busan.

"(Jeon's) crimes have been ascertained, and there is a reasonable concern that the suspect might attempt to destroy evidence or flee," Kim Woo-soo, a judge from the Seoul Central District Court, said of the reasons for the court's decision.

During the questioning at the Seoul Central District Prosecutors' Office on Wednesday, Jeon admitted to accepting the kickbacks from CJ Group while denying they were in exchange for any favors, prosecutors said.

The prosecution probe into CJ's alleged illegal lobbying for tax breaks has been picking up pace recently after its chairman Lee Jay-hyun was indicted for embezzlement and offshore tax evasion charges in a separate corruption case last month.

During the audit into CJ Group in 2006, tax authorities obtained evidence that the group and its chairman allegedly dodged some 356 billion won (US$319 million) in corporate and income taxes. However, the NTS neither collected nor levied any fines on the family-run conglomerate, according to prosecution sources.

The prosecution office suspects that CJ group and Lee illegally lobbied the former top tax official so that the conglomerate could reduce its tax burden or even avoid paying the massive amount of taxes altogether.

CJ Group officials alleged that they gave the money and expensive designer watches to Heo Byung-ik, the NTS deputy commissioner at the time, asking him to relay them to Jeon.

Heo, who was arrested pending trial on Saturday, admitted to taking the kickbacks but claimed that he had handed the money over to Jeon, according to prosecutors.

Suspicions have also risen that Jeon, who is banned from traveling while the probe is ongoing, received the watches at a Seoul hotel as an inauguration gift from Chairman Lee.

In 2008, Jeon was found guilty of taking some 60 million won from the former head of the Busan Regional Tax Office, Jung Sang-gon, in exchange for promoting him.

Three years later, Jeon underwent a separate probe by prosecutors on charge of receiving a high-priced painting from the agency's No. 2 official in exchange for securing the top post before he was officially given the job.

Upholding a lower court's ruling, a Seoul appeals court acquitted Jeon of the second charge in August 2012.

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