Arrested Individuals Increased 8 Times Compared to Last Year
Second Special Crackdown Until July
[Asia Economy Reporter Seongpil Jo] The National Police Agency announced on the 2nd that it arrested 1,941 people and detained 168 of them through a special crackdown on Jeonse fraud conducted over six months starting from July last year. Compared to the previous year, the number of arrests increased eightfold, and the number of detentions increased fifteenfold.
The police flag of the Seoul Seodaemun-gu Police Agency is fluttering in the wind. Photo by Hyunmin Kim kimhyun81@
Earlier, on July 25 last year, the National Police Agency established a dedicated investigation headquarters led by Investigation Director Yoon Seung-young and focused on cracking down on seven major types of Jeonse fraud: ▲no-capital and gap investment ▲empty Jeonse ▲false notification of real estate rights ▲unauthorized contracts pretending to be the actual owner ▲contracts exceeding the scope of delegation ▲false guarantees and insurance ▲illegal brokerage.
As a result, six no-capital gap investment organizations that embezzled deposits from about 6,100 properties nationwide were uncovered. Fourteen people, including consulting operators and landlords who planned the crimes, were detained, and about 350 accomplices were arrested. Additionally, 15 organizations nationwide that embezzled hundreds of billions of won in Jeonse loan funds through false Jeonse contracts were cracked down on, with 85 key figures and ringleaders detained and about 600 accomplices arrested. The police also apprehended 373 licensed real estate agents involved in various Jeonse frauds or illegal brokerage activities.
By crime type, the most arrests were made for 'false guarantees and insurance,' which involves embezzling Jeonse loan funds from financial institutions. This was followed by 'no-capital gap investment,' where multiple Jeonse contracts were signed using so-called 'nominee' names to embezzle deposits and rebates, and 'violation of the Licensed Real Estate Agent Act,' such as failure to disclose important Jeonse contract details.
By suspect status, fake landlords and tenants involved in 'false guarantees and insurance,' licensed real estate agents who engaged in illegal brokerage, and landlords who failed to return deposits due to no-capital gap investment or empty Jeonse accounted for the majority.
Based on cases sent to the prosecution, the confirmed number of victims was 1,207, with total damages amounting to 233.5 billion won. It was confirmed that mainly young people in their 20s and 30s, who have little social experience and lack real estate transaction knowledge, suffered significant damage. The average damage per victim was around 100 to 200 million won, with multi-family housing (villas) being the majority by housing type.
Among major arrest cases, the Anti-Corruption and Economic Crime Unit of the Southern Gyeonggi Provincial Police Agency detained five people, including landlords, and arrested 137 in the 'Villa God' case involving 3,493 properties. The Southern Gyeonggi Provincial Police are currently investigating about 80 people related to this case. In addition, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency detained two people, including consulting operator A, as the behind-the-scenes figures in the deceased 'Villa King' case and arrested seven others. The Metropolitan Investigation Unit of the Incheon Metropolitan Police Agency arrested 151 members of an organization that embezzled 8.3 billion won through false Jeonse contracts and detained 14 people.
Due to the recent decline in real estate prices and ongoing concerns about additional Jeonse damages, the police decided to extend the special crackdown period by six months. The second special crackdown, which will continue until July 25, will focus on four major types of Jeonse fraud based on the analysis of previous crackdown results: ▲malicious landlords ▲behind-the-scenes forces such as consulting operators ▲embezzlement of Jeonse loan funds ▲illegal appraisal and brokerage activities.
Yoon Hee-geun, Commissioner of the National Police Agency, said, "We will continue the special crackdown with the determination to eradicate Jeonse fraud." He added, "We will analyze and supplement the achievements of the past six months and secure momentum with the mindset of starting anew." Commissioner Yoon also stated, "We will do our best to play a central role in the national issue of 'eradicating Jeonse fraud' through cooperation with related organizations such as the Ministry of Land, Infrastructure and Transport and the prosecution."
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