Conflict in Guro-dong Regional Housing Association Spreads with Additional Lawsuits

Some Union Members and the 'Actual Owners' of the Agency Sued

[Image source=Yonhap News]

Some members of a regional housing cooperative in Guro-gu have filed a lawsuit against the cooperative chairman and the business agency, and now they have additionally sued the 'actual owner' of the business agency.

The Seoul Metropolitan Police Agency's Violent Crime Investigation Unit took over the case in late May, after the victims filed a fraud complaint against Mr. A and Mr. B at the Guro Police Station in April. It is reported that Mr. A will be summoned for questioning as a suspect on the afternoon of the 5th.

The Guro-dong regional housing cooperative case is currently being tried at the Seoul Southern District Court. Three people, including former cooperative promotion chairman Mr. Lee (79) and the business agency representative Mr. Ryu (59), have been indicted on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. They are accused of embezzling a total of approximately 23.9 billion KRW in contract deposits from 477 victims between November 2016 and September 2019. According to the court, they promoted the project as if 60-80% of land use rights had been secured, making it possible to move into the apartments by 2021. To obtain approval for establishing a regional housing cooperative, the condition of securing land use rights for at least 80% of the housing construction site area must be met. However, it was found that the actual land use rights they secured were only about 20-30%.

The victims claim, "Mr. A, although not a representative of any business agency, exercised substantial influence and secured agency contracts related to the regional housing cooperative project." It is known that Mr. A signed a performance agreement with Mr. Ryu and, in exchange for providing initial funds for corporate establishment and promotional hall construction, obtained the right to select companies related to the cooperative project. The victims further claim that after the promotional hall for the regional housing cooperative project opened at the end of November 2016, Mr. A withdrew from the cooperative project within 40 days and gained about 6 billion KRW in unfair profits.

Mr. B operates an interior construction company and reportedly promised Mr. A to take on the promotional hall construction, but Mr. A assigned him advertising agency duties and demanded 1 billion KRW as compensation.

Attorney Jang Woo-jin of the law firm Jisol, representing the victims, stated, "From the beginning, Mr. Lee and Mr. Ryu had no intention of properly carrying out the regional housing cooperative project, inflated the land acquisition rate to collect money from cooperative members, and later the business agency recruited members and the money received from them flowed to Mr. A and Mr. B." He added, "We filed the lawsuit viewing Mr. A and Mr. B as 'accomplices in fraud.'"

When asked about his position on the related case in a phone interview on the 4th, Mr. A said, "I have nothing to say."