New, report, blasts, hagwon, industry, crimes

I know that you all will just be shocked, shocked to read this.

#55-year-old Mr. Choi, who runs a hagwon focused on the entrance exams for specialized high schools, sends parents the billing information for curriculum materials and other expenses, asking them to pay cash to his employees rather than using bank transfers. Through this method he can hide W190 million ($164,000) from the government. Last year he was assessed W110 million in taxes after an audit. 

#50-year-old Mr. Park, who owns a science and math hagwon, charged over W1 million in lecture fees on a cash-only basis and deposited it in his wife's bank account. The National Tax Service (국세청) assessed him a W100 millon tax bill for hiding W200 million in revenue that way.

#One arts hagwon in the Busan area put out false advertisements saying it had "the nation's highest rate of admission to top arts programs" and received a warning from 공정거래위원회. A foreign language hagwon in Seoul was also caught falsely claiming to have a teacher certified by the Canadian government.

The state of affairs in the world of domestic hagwons, where illegal, quasi-legal, and unjust conduct is rampant, was revealed in a report published on the 2nd. Unjust actions that take advantage of the hearts of parents who want to send their children to good universities include tax evasion, of course, as well as inflated fees, operating without a license, and false advertising.

Audits conducted by the NTS uncovered W63.5 billion in hidden profits, leading to W26 billion in fines, an average of W190 million per business.

The NTS listed the three top ways hagwons attempt to avoid taxes: demanding high lesson fees be paid in lump-sum cash payments only; demanding payment for curriculum materials and other costs be made into employees' bank accounts; and having supplemental lesson fees be paid in cash into the bank accounts of relatives.

The report found 15 hagwons who engaged in false advertising which failed to reveal lesson, use, and educational fees or how to obtain refunds.

One Seoul hagwon focused on university entrance exams was given a warning after opening its doors with a homepage saying "at least 45% of exam-takers nationwide selected", "we have 180,321 social studies researchers and 143,142 science researchers in the 2010 schoolyear" followed by "our students score 20 points higher than the national average".

Police enforcement actions uncovered 3,219 cases, involving 3,270 people, of unregistered hagwons and hagwon teachers doing private lessons. The 3,161 unregistered hagwons represented 98% of total cases. This includes cases such as a teacher who earned W8 million in lesson fees by teaching lessons to 67 high school students in Incheon without registering; a hagwon owner in Incheon who earned W210 million over five years by teachign 1,200 high school students without registering; and an unregistered engineering hagwon that earned W480 million -- W2.07 million per student.

In Seongnam, Gyeonggi-do, seven people were caught making excessive profits of W2.1 billion by operating an unregistered franchise hagwon.

Six teachers were caught running an illegal school. In Yecheon, in Gyeongsangbuk-do, they were caught running a school teaching various students at W200,000 per month from March 2007 to November of last year using middle school math teachers.

The crackdown on SAT hagwons by the Gangnam Office of Education in Seoul has found 27 schools that charged excessive fees, did not report the hiring and firing of teachers, or filed false paperwork with the government, leading to warnings, injunctions, and business susupensions.