Huge Tax Evasion of a Loan Shark

A lone shark, who had hidden interest gain of 105.8 billion won while lending over one trillion won, was captured, according to the National Tax Service (NTS).

The NTS said on May 11 that it charged 18 lenders, including L who failed to pay his entire tax due on the interest gain of 105.8 billion won over the past decade.

It is a rare case that the amount of private money is more than 100 billion won and hidden profits are more than 100 billion won.

The NTS said that four people, including L, were indicted for a tax criminal offense and the remaining 14 for violating the law on loan business.

Since April 12, the agency has conducted a general tax audit on 270 earners who hid their profits or gains.

It is found that L had run about 10 offices since the mid 1990s, in which he had evaded tax payments by writing loan contracts under 13 false names.

Though he had lent 1.087 trillion won, he reported to the NRS that he lent only 1.8 billion won.

The agency also found out that L used 40 billion won for land speculation and that he kept expanding his loans by repeatedly mortgaging the land on which he speculated.

The NTS also prosecuted unregistered private debt loaners who used illegally stashed company money and those who forced female debtors into prostitution.

The prosecuted lenders collected an interest rate of around 15-20 percent a month and created encrypted records to hide information regarding the loans and profits.

“We will take stronger actions against loan offenders who evaded tax payments by charging them to the prosecutors, while reducing the tax intervention on lawful and healthy private finance businesses in order to stabilize the finance of the general public,” said the NTS.

Eun-Woo Lee libra@donga.com