Prosecutors Raid Office of Incheon Jeonse Fraud 'Geonchukwang'...Embezzlement Charges Detected

The prosecution has launched a forced investigation after additionally uncovering embezzlement charges against the so-called 'Construction King,' who is accused of orchestrating organized jeonse fraud centered around the Michuhol District in Incheon.

According to legal circles on the 2nd, the Criminal Division 5 of the Incheon District Prosecutors' Office (Chief Prosecutor Park Seong-min) conducted searches of several offices belonging to construction businessman A (61, detained and indicted) located in Michuhol District, Incheon, and Donghae, Gangwon Province, that morning.

The prosecution reportedly detected embezzlement charges against A during a supplementary investigation after receiving A's gang’s jeonse fraud case from the police.

While tracing the jeonse deposits received from tenants and the funds of the comprehensive construction company operated by A, clues were found, and a search warrant was also issued by the court.

Previously, A established Donghae ICT, a special purpose company (SPC) for apartment construction, and was selected as the project implementer for the Mangsang 1 District project by the East Coast Economic Free Development Zone Authority in 2018.

During this process, allegations that former Gangwon Province Governor Choi Moon-soon and other politicians received special favors are currently under preliminary investigation by the National Police Agency’s Criminal Investigation Headquarters. The prosecution is focusing intensively on A’s embezzlement of funds, separate from the special favor allegations.

A banner informing about the damage caused by the Jeonse fraud victims in Michuhol-gu, Incheon is hung on the apartment's main entrance door.
[Image source=Yonhap News]

A and 61 accomplices are accused of having fraudulently received 38.8 billion won in jeonse deposits from tenants for 481 apartment and villa units in the Michuhol District area of Incheon over recent years.

Among them, 10 people including A have already been brought to trial, and the second hearing is scheduled to be held at the Incheon District Court on the 3rd.

Since 2009, A purchased land under the names of licensed real estate agents or brokerage assistants.

Subsequently, through the comprehensive construction company he operated, he built small-scale apartments or villa buildings, then gathered jeonse deposits and mortgage loans to construct more multi-family housing, thereby expanding his real estate holdings. He is currently known to own a total of 2,708 units in Incheon and the Gyeonggi Province area.