Prosecutors indict former Deutsche Motors chairman Kwon Oh-soo and his wife over 26.6 billion won in false tax invoices

[Financial News] Prosecutors have indicted former Deutsche Motors chairman Kwon Oh-soo and his wife for allegedly using nominee companies and shell companies to exchange false tax invoices worth 26.6 billion won and evade taxes.
The Tax Crime Investigation Division of the Seoul Central District Prosecutors' Office, headed by Chief Prosecutor Yong Tae-ho, said on the 23rd that it had indicted Kwon and his wife, identified only as A, without detention the previous day. They face charges of violating the Act on the Aggravated Punishment, etc. of Specific Crimes, including the issuance of false tax invoices.
Kwon and A are accused of establishing three companies under borrowed names to monopolize profits from various showroom and interior construction projects commissioned by the Deutsche Motors Group. They allegedly used two of the companies, which were shell companies, to issue and receive false tax invoices.
According to prosecutors, the two funneled construction projects worth approximately 107.9 billion won, commissioned by the Deutsche Motors Group, to the three companies over roughly four years from November 2017 to October 2021.
In reality, a construction company nominally owned by A carried out all the projects. However, investigators found that the two additionally established two shell companies to make it appear as though the contracts had been secured through competitive bidding and normally signed with Deutsche Motors.
Prosecutors believe that, after disguising some of the work as having been won and carried out by the shell companies, Kwon issued or received false tax invoices worth approximately 6.2 billion won, while A issued or received invoices worth approximately 20.4 billion won.
A also faces tax evasion charges. Prosecutors believe she evaded approximately 190 million won in gift tax by placing shares in the three companies in the names of acquaintances of Kwon and A as nominal owners, thereby avoiding gift taxes arising from transactions between related-party corporations.
She is also accused of evading approximately 460 million won in comprehensive income tax by concealing income and receiving back in cash dividends paid to the nominee shareholders.
Deutsche Motors is an importer and seller of foreign automobiles. Kwon was previously indicted for allegedly artificially inflating Deutsche Motors' stock price for roughly three years starting in 2009. In April last year, the Supreme Court upheld his suspended prison sentence.
Prosecutors said, "We will do everything possible to maintain the prosecution so that offenders who undermine the tax order and threaten the national finances receive punishment commensurate with their crimes."
 
[email protected] Choi Eun-sol Reporter