Two palatial Embassy Row homes, three luxury cars and other personal property belinging to South Korean businessman Tongsun Park have been seized by U.S. Internal Revenue Service agents here in an apparent effort to keep the assets from being sold or moved out of the country.
According to sources close to Park, who has been abroad since last October, about 15 IRS agents entered Park's homes at 2211 30th St. NW and 2850 Woodland Dr. NW late Monday afternoon. They posted government "seizure" notices on the front doors and put the homes under 24-hours guard.
The agents have spent the last two days making an inventory of Park's furnishings and valuables, including antique furniture, oriental rugs, jade, porcelain and numerous art objects. Yesterday, the agents also seized Mercedes, Cadillac and Lincoln Continental automobiles at the Woodland Drive home.
In court documents filed just before the agents moved in Monday afternoon, the IRS said it was acting because Park "has neglected or refused to pay" nearly $4.5 million in back taxes the IRS claims he owes for 1972 through 1975. The IRS filed tax liens for the amount on Park's bank accounts and property on Jan. 19.
Justice Department officials said yesterday that the civil tax action by IRS is unrelated to the current criminal investigation of allegations that Park played a key role in a South Korean government scheme to buy influence on Capitol Hill. Park is reported to have dispensed hundreds of thousands of dollars each year since 1970 in cash and gifts to members of Congress to ensure continued U.S. support for the regime of South Korean President Park Chung Hee.
After initially cooperating with federal investigators, Tongsun Park left the United States last October for London. He has since transferred most of business activities from Washington to London.
Frank C. Frantz, Park's accountant, and William G. Hundley, his personal attorney, said in separate telephone interviews yesterday that the IRS action was premature and uncalled for. They have contended that Park is exempt from U.S. income taxes.
Frantz said he has attended two administrative conferences with IRS officials since the liens against Park were filed in January. "They are taking a strong position that he is liable," Frantz said. "But I think their action is somewhat premature because the case has not been resolved yet. We plan to challenge their determination in court."
Hundley said he considered the IRS seizures "totally unnecessary and uncalled for harassment because they know we're going into litigati on on this."
Four years ago, the IRS made a similar effort to assess Park for back taxes, but finally ruled he was not liable for taxes because he is a nonresident alien whose income comes from sources outside the U.S., according to Park associates. For reasons it has not made public, the IRS now believes that Park can be taxed.
While declining to comment on the specifics of the Park case, an IRS spokesman said yesterday that the government will seize property "to protect asssets from being dissipated or being placed out of our reach."
According to informed sources, the IRS has been told that a considerable amount of jewelry already had been removed from Park's 30th Street house by his associates after the IRS lien was filed in January.
The jewels included 65 pairs of diamond, ruby, emerald and lapis lazuli cufflinks that were part of a collection on display in a lighted teakwood case in Park's master bathroom. Another 15 pairs of cufflinks, a diamond necklace, assorted rings, other women's jewelry and 40 men's gold wristwatches also are known to be missing from the house.
The IRS has been told that associates of Park photographed the jewelry with a Polaroid camera, packed the valuables and took them away.
Most of the jewelry is believed to have been delivered to Park overseas. But one source told the IRS that some of it may have been taken to the vault in Park's Pacific Development Inc. building at 1604 K St. NW.
The IRS has also been told, according to sources, that jade and porcelain art objects at the 30th Street address were packed for shipment to Park after the lien was filed. The shipment reportedly was taken to Dulles International Airport but was not sent overseas because of legal advice from a Park attorney. The crates now reportedly are in locked storage rooms in the basement of park's home.
IRS agents at the 30th Street home yesterday were seeking the keys to the locked storage rooms and inventories of what was packed in the crates. The agents were told that silver flatware and serving pieces worth an estimated $35,000 also were stored in the locked rooms.
A Justice Department tax attorney said yesterday that there does not appear to be anything illegal about someone removing his personal property after a lien is filed against it.
Another attorney familiar with the case said there are civil statutes that might make U.S. citizens liable for any losses the government suffers because of the removal of the valuables!
In an affidavit filed in support of the court order to enter Park's homes, IRS agenct Gregory W. Leet said he believed the houses contained "valuable antiques, oriental rugs, a 1976 Jaguar sedan and furnishings of substantial value."
Leet said Park has paid $9,000 in customs duties on various oriental rugs," which indicates that they have a value which could be as high as $114,000." He also said in the affidavit that on Sept. 29, 1976, he saw two large china vases, rugs and a large carved wooden chest at Park's 30th Street home.
He said further that a 1976 Jaguar is registered in Park's name but could not be located in the metropolitan area or at the airport from which Park left the country.
Sources close to Park's business here told The Washington Post that the car was sold several weeks ago.
The Mercedes sedan was parked in the driveway of Park's Woodland Drive house yesterday afternoon. There was a "seizure" sticker on its front windshield and an IRS agent's car blocking its path. A Cadillac convertible and a Lincoln Continental were in the garage nearby. Sources said later in the day that the IRS had removed all three automobiles, apparently to government storage.
IRS agents working at the Park homes yesterday declined to answer a reporter's questions. A spokesman said later that property seized in such a manner would be kept under guard until a resolution of the tax case.
Although Park recently purchased a $250,000 house in London's Mayfair section, sources said his few remaining employees here have been recently concerned about salaries and bills going unpaid.
Park virtually shut down his Pacific Development office here at 1604 K Street NW. Most of the employees have been placed elsewhere.
Only two employees now remain at the Pacific Development office, where debris and litter have piled up.
Park, who was frequently sued by creditors with small claims in his less affluent days in Washington, also now owes $450 to his meat market here and $90 to the French Market In Georgetown.
In addition, one source close to Park said that he has allowed bills to mount in the Dominican Republic where his villa, with its guest house, costs him $16,000 a year, plus $250 in monthly maintenance fees.
One creditor in Santo Domingo used the presence of an NBC camera crew outside Park's door to try and embarrass Park into paying $600 owed for custom-made furniture.
The creditor knocked on Park's door and presented his bill for payment. According to a source present, Park told a servant to assure the cabinet maker the matter would be taken care of the next day, but it was not.