Loan Broker for 'Kkangtong Jeonse Contract Forgery' Sentenced to 7 Years in Second Trial

A man in his 60s was sentenced to prison again in the second trial for committing a large-scale loan fraud by purchasing numerous "Kkangtong Jeonse" (Jeonse prices equal to or higher than sale prices) houses and forging lease contracts to make it appear that the collateral value was sufficient.

According to the legal community on the 8th, the Seoul Central District Court Criminal Appeal Division 2 (Presiding Judge Kang Hee-seok) sentenced Kim (69), who was indicted on charges of fraud and forgery of official documents, to seven years in prison, the same as in the first trial.

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The court stated, "Without any significant assets or funds, he proceeded with gap investment and acquired dozens of real estate properties. This crime caused multiple victims, and the extent of the damage is considerable," adding, "He orchestrated and executed the crime proactively, and continues to make baseless false claims to evade responsibility, shifting blame onto other defendants. The damages have not been recovered."

Earlier, Kim was brought to trial on charges including leading a large-scale real estate loan fraud by acquiring a company under his wife's name in 2018. According to the prosecution, Kim and his group purchased dozens of newly built villas and one-room apartments with "Kkangtong Jeonse" by paying only small amounts such as brokerage fees and registration fees, effectively acquiring them with no capital, and proceeded with real estate investment and rental business. The newly built villas occupied by Jeonse tenants were purchased without paying the sale price by taking over the Jeonse deposit.

Kim's group sought "borrowers" who needed loans and "victim lenders" who would provide loans through brokers. They then presented forged monthly rent contracts for the Kkangtong Jeonse houses to deceive the lenders into believing the collateral value was sufficient, and received compensation from the borrowers who successfully obtained the loans. During this process, the contracts were forged to show that the tenants paid only small monthly rent deposits. In reality, tenants were living there by paying Jeonse deposits worth hundreds of millions of won, making it impossible to repay the loans using these houses as collateral.

Kim had multiple prior convictions including fraud and violations of the Tax Offenses Punishment Act, and it was confirmed that he committed these crimes during the recidivism period (within three years after completion or exemption of sentence). In court, he also tried to shift responsibility to the company accountant who was indicted together.

The first trial sentenced Kim to imprisonment. Nine others indicted together, including his wife, accountant, brokers, and borrowers, were mostly sentenced to imprisonment or suspended sentences for their involvement in the crime.

Kim and others appealed and filed a further appeal, leading this case to be reviewed by the Supreme Court.