Police Crack Down on Jeonse Fraud Targeting 2030 Generation, Arrest 2,895 People... 288 Detained

54.4% of Victims Are Aged 20-30... No-Capital Gap Investment and Empty Jeonse
Criminal Profits Reach 5.6 Billion Won, 10.2 Times Increase Compared to First Crackdown

The National Police Agency's National Investigation Headquarters announced on the 8th that it conducted a special crackdown on jeonse fraud for about 10 months from July last year to last month, arresting 2,895 people and detaining 288 of them. This is the result of continuous crackdowns, including the arrest of an additional 954 people and an increase of 708 suspects after the first round of jeonse fraud crackdowns.

Hwang Byung-ju, Chief of the Criminal Division at the Supreme Prosecutors' Office (center), Yoon Seung-young, Director of the Investigation Bureau at the National Police Agency (left), and Nam Young-woo, Director of Land Policy at the Ministry of Land, Infrastructure and Transport, are announcing the results of the planned investigation into jeonse fraud and the interim results of the special crackdown on the morning of the 8th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Yonhap News

False Guarantees and Insurance Most Common... Police Apply 'Organized Crime Group Offense' and Others

They arrested 486 licensed real estate agents involved in various jeonse frauds who engaged in illegal brokerage activities and also launched investigations into 45 illegal appraisers who deliberately inflated appraisal values.

By type of crime, false guarantees and insurance accounted for the largest number with 1,471 people. Unfunded gap investors numbered 514, and illegal brokerage activities followed with 486. By regional police agency, Gyeonggi Nambu Police Agency arrested the most with 275 cases and 651 people, followed by Seoul Metropolitan Police Agency (137 cases, 623 people) and Incheon Police Agency (80 cases, 389 people), where many jeonse fraudsters were also apprehended.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency arrested three people, including brokers and name holders, who conspired with a deceased landlord who acquired about 1,000 villas and defrauded 347 tenants of deposits worth approximately 54.2 billion KRW.

The Jungnang Police Station in Seoul arrested nine people, six of whom were detained, for forging resident registration records or unlawfully moving tenants out, causing them to lose priority repayment rights on their rental deposits, thereby increasing the real estate collateral value and secretly defrauding loans totaling about 1.4 billion KRW using the property as collateral. The police applied the organized crime group offense charge after uncovering that the suspects divided roles among themselves.

So far, a total of 2,996 victims have been identified, with damages amounting to 459.9 billion KRW. Victims in their 20s and 30s accounted for the largest share at 54.4%, followed by those in their 40s and 50s at 15.3% and 9.4%, respectively. By housing type, multi-family houses and officetels accounted for 83.4% of the damage.

Police Arrest Jeonse Fraudsters One After Another... Yoon Hee-geun: "We Will Correct Illegal Jeonse Practices"

Based on investigation requests from the Ministry of Land, Infrastructure and Transport, 31 organizations nationwide were uncovered, including 10 unfunded gap investment fraud groups owning over 10,300 properties and 21 jeonse loan fraud groups that embezzled about 78.8 billion KRW through false contracts.

The police, in cooperation with the prosecution, strictly responded by applying the crime of criminal organization or group (Article 114 of the Criminal Act) for the first time to 41 members of six jeonse fraud organizations.

In particular, during this second crackdown, the police focused intensively on four major types of illegal jeonse practices: malicious landlords, jeonse loan fraud, illegal brokerage, and illegal appraisals. In the process, the mastermind of the Michuhol incident in Incheon, where victims died consecutively, was arrested in February, and three people involved in a malicious landlord case where victims died were also arrested in May, accelerating the investigation.

The police announced that they have recovered about 5.61 billion KRW in criminal proceeds related to jeonse fraud cases. This includes 3.88 billion KRW from organized crime group activities, 1.72 billion KRW from forgery of private documents, and 10 million KRW from obstruction of business. This is a tenfold increase compared to the first crackdown.

Yoon Hee-geun, Commissioner of the National Police Agency, stated, "To eradicate jeonse fraud that threatens people's livelihoods, we established a close cooperation system with the Ministry of Land, Infrastructure and Transport and the prosecution to carry out the nationwide second special crackdown on jeonse fraud."