Tri-Service General Hospital superintendent Wang Chih-hung (王智弘) and 24 other military physicians on Wednesday were sentenced by the High Court to between two months and a year in prison in a tax evasion case.
The sentences can be commuted to fines and are subject to appeal.
The physicians were among 27 people indicted on tax evasion charges in 2016, with the Taipei District Court finding them not guilty in the first trial.
However, prosecutors appealed the decision and the High Court overturned the ruling, finding 25 of the defendants guilty of using a charitable foundation as a vehicle for tax evasion.
In 2016, the Taipei District Prosecutors’ Office began investigating allegations that former National Defense Medical Center head and Academia Sinica fellow Chai Chok-yung (蔡作雍) had used a charitable foundation to accept donations from more than 200 physicians from 2005 to 2009, and then used the foundations to return 95 percent of the money to the donors as “subsidized research fees.”
Chai and 224 others avoided prosecution by admitting to the allegations and paying fines.
However, Wang, who was head of the Army Logistics Command’s medical office when the investigation began, and 26 military physicians were indicted by the prosecutors’ office after contesting the charges.
The district court in June 2018 found the 27 defendants not guilty, saying that they had received foundation subsidies not equal to 95 percent of their donations for the year and that the ratio of donations to subsidies varied, with some defendants donating more than they received.
However, the High Court considered statements from foundation officials and accountants, and reviewed bank transaction details, finding that the foundation allowed those who donated to apply for research, study or social welfare grants of up to 95 percent of the amount they donated.
The second trial found that the foundation allowed those who donated to get back most of what they gave and benefit from tax deductions.
Only 5 percent of what was donated went to the foundation, and there was no substantial benefit to them, so the money did not meet the purpose of donations, the High Court said, adding that the system was set up to evade taxes.
The tax evasion activity of the 25 defendants did not all take place in the same year and their intentions were separate from each other, so they are to be punished separately, the High Court added.
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