'Dream of Owning a Home' Shattered by Housing Cooperative Fraud Gang Sentenced to Prison

Seoul Sanggye 3 District Regional Housing Association Business Agency Operator Sentenced to 7 Years in Prison

[Asia Economy Reporter Yoo Byung-don] The operator and representative of the business agency for the Sangye 3 District local housing cooperative in Nowon-gu, Seoul, who deceived members of the local housing cooperative and embezzled billions of won, have been sentenced to prison.

The Criminal Division 11 of the Seoul Northern District Court (Presiding Judge Go Chung-jung) on the 27th sentenced Lee (57), the actual operator of the business agency who was arrested and indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, to 7 years in prison, and the representative Jung (42) to 4 years in prison.

Additionally, Bang (62), who worked as an executive at the same company, was sentenced to 5 years in prison, and Lee (74), the chairman of the local housing cooperative promotion committee who was accused of conspiring with Lee and his group (including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes), was sentenced to 3 years in prison with a 4-year probation.

The court stated the reason for the sentence, saying, "Considering the severity of the crime relative to the extent of the damage, the fact that most of the damages have not been recovered, and that the victims petitioned for severe punishment."

They were arrested and indicted last year on charges of deceiving 246 cooperative members into believing that general sales had been confirmed and embezzling about 9.1 billion won from July 2017 to December last year.

Although the project site was originally unable to build apartments over 25 floors and the land use consent rate was at an early stage (1?22%), they deceived cooperative members by claiming that more than 66% had been secured.

Lee and others committed fraud targeting low-income, homeless citizens by moving between regions. They used part of the money embezzled from Sangye 3 District cooperative members as settlement money for failed local housing cooperative projects in other areas and also as funds for newly promoted local housing cooperative projects in other regions.

It is reported that there are about 1,000 members who joined the Sangye 3 District local housing cooperative, with the contract deposits alone amounting to 50 billion won.