[Edaily Marketin JI YEONG-EUI YunJi Kim Soyoung Park Reporters] “The CEO said, ‘Since there’s so much money flowing around, shouldn’t we bring in companies owned by unknown third parties to make it look less suspicious?’”
“If [the fake transactions] exceed 3 billion won, it’s grounds for prosecution. That’s why they’re trying to keep it below that threshold.”
— Excerpts from recorded conversations and KakaoTalk chats containing evidence of tax invoice manipulation at CashCow

Allegations of fictitious transactions worth billions of won have surfaced surrounding CashCow, a startup that made a name for itself with its “receipt reward service.” KakaoTalk chat logs and audio recordings obtained by Edaily contain conversations in which sales figures in the hundreds of millions of won and the timing of tax invoice issuance were determined even before business partners or contract details had been finalized. The records also contain evidence of discussions on how CashCow would pay money to Company A and then divert that money to Company B. When tax authorities launched an investigation and raised concerns, evidence shows that the parties belatedly adjusted contracts and even exchanged messages suggesting they “coordinate their stories.”

The Southern Gyeonggi Provincial Police Agency is currently investigating allegations that Cash Cow and its affiliates created “fake tax invoices” totaling 7.9 billion won to embezzle company funds and evade taxes.

Tip

on 7.

9 Billion Won in Tax Evasion… Police Investigation Follows NTS Special Tax Audit

According to an exclusive report by Edaily on the 21st, the Anti-Corruption Investigation Unit of the Southern Gyeonggi Provincial Police Agency is examining allegations that Cash Cow and its affiliates violated the Act on the Punishment of Tax Crimes, as well as whether actual services were provided. Previously, after investigating the issuance and receipt of tax invoices between Cash Cow and multiple business partners, the National Tax Service filed a complaint with the Southern Gyeonggi Provincial Police Agency last November regarding certain transactions.

The investigation began with a tax evasion tip received by the National Tax Service in July 2024. Former executives and shareholders of Cash Cow, through a law firm, identified the tax invoices and cash flows exchanged between Cash Cow and various companies from 2018 to 2021 and submitted this information to the National Tax Service. The total supply value of transactions presumed to involve the issuance and receipt of fake invoices amounts to approximately 7.9196125 billion won.

The shareholders alleged that Cash Cow created fictitious transactions on its books by alternately generating sales and purchases using fake tax invoices and diverting funds among various companies. They claimed that by employing this method for several years, Cash Cow siphoned off funds to external parties, ultimately causing the company to fall into capital impairment.

Allegations of “Transaction Manipulation” in KakaoTalk... “Set the Amount First, Contract Later”

The preliminary investigation materials from the National Tax Service obtained by Edaily contain numerous KakaoTalk chat logs involving Cash Cow employees and affiliates, which are suspected of being related to the creation of “fake tax invoices

.”

What stands out in particular in the KakaoTalk conversation records is that the person who led CashCow’s “tax invoice issuance” transactions was not a CashCow executive, but rather CEO Kim of the investment firm ISTN (now Blueard). ISTN is a company specializing in the implementation of SAP-based enterprise systems and IT consulting, and it participated in CashCow as a strategic investor (SI). CEO Kim set the amounts for CashCow’s management and affiliates and gave specific instructions regarding when to issue tax invoices and where to transfer the funds.

For some transactions, the amount was determined before the contract details were finalized. Around May 2020, Mr. Kim, CEO of ISTN, requested in a chat room with Company C—a Cash Cow business partner—and a Cash Cow representative: “Please draft a supply contract for 602 million won and issue tax invoices for 371 million won in May and 231 million won in June.” In response, the representative of the partner company asked, “What should the contract be about?” Subsequently, the contract title was set as “AI Software Development Utilizing OO Big Data,” and the contract document was uploaded to the chat room that afternoon.

Conversations suggesting that the contract documents were being retroactively altered after the tax authorities raised concerns were also confirmed. In August 2019, when a Cash Cow official reported that the Bundang Tax Office was raising concerns about tax invoices being issued before the contract period had ended, ISTN CEO Kim replied, “Resolve this by amending the contract or reissuing the tax invoices,” and added that it would be best to “coordinate your stories regarding the cause, such as an error.”

Cash Cow CEO: “These Were Actual Transactions, Not Tax Evasion”… Accomplice Admits to Charges

CEO Seol has categorically denied the allegations. In a phone call with Edaily, he stated, “There was no

tax evasion

,

”

and clarified that the tax audit at the time concerned a VAT adjustment issue, not tax evasion. He also argued that the transactions in question were legitimate purchases and sales of actual software and IT solutions.

CEO Seol explained, “The company cannot simply refrain from purchasing necessary outsourced services or solutions just because it lacks funds,” adding that the company operated under a structure where it used funds secured from the sale of its in-house developed solutions to purchase necessary systems. He continued, “The National Tax Service viewed that aspect as fraudulent, but we do not acknowledge it as such. We have currently filed a petition for a tax (appeal) hearing.”

On the other hand, Mr. Kim, CEO of ISTN, partially admitted to the charges related to fake tax invoices. Mr. Kim explained, “I participated in the fictitious transactions out of good faith, in an effort to save Cash Cow.”

CEO Kim told Edaily, “I have already admitted during the tax audit that there was a certain amount of fictitious revenue and have paid the corresponding fines.” He added, “In order for [Cash Cow] to maintain investment from financial investors (FIs), it needed to meet a certain level of revenue, but as that became difficult, they asked for help. Based on trust with [Cash Cow], I introduced a few companies to facilitate the fictitious transactions.”

However, CEO Kim maintained that he did not evade taxes or gain personal benefit through these actions. He said, “I deeply regret having disrupted the tax system,” but added, “I did not evade taxes, embezzle funds, or commit breach of trust; I paid all value-added tax, and records of all incoming and outgoing funds remain in my bank account.” He added that a related tax audit and a subsequent police investigation are currently underway, and he is responding with the assistance of his attorney.

In this regard, Blueard maintains that the CEO’s personal actions are separate from those of the corporation, and that the company has neither been involved in fictitious transactions nor admitted to any related allegations.

Related Article☞ Through its ongoing series *Tracking Allegations of Accounting Manipulation and Chain Fraud: The Trap of Fake Ledgers*, E-Daily is covering suspicions that the dispute involving Cash Cow extends to As We Make.