3400 Jeonse Fraudsters in One Year... Gang Embezzling 250 Billion Won Charged as 'Criminal Organization'

Application of Crime Syndicate Organization Charges to 10 Groups and 111 Individuals... 48 Detained
Total of 3,466 Jeonse Fraud Offenders Caught in One Year... Damage Amounting to 600.8 Billion Won

The police have apprehended over 3,400 individuals involved in jeonse fraud over the past year and have detained 367 of them. Among these, 10 organizations responsible for nearly 500 billion KRW in damages were charged with organizing criminal groups.

The National Investigation Headquarters of the National Police Agency announced on the 24th that during the second nationwide crackdown on jeonse fraud conducted over six months from January this year, they uncovered 632 cases and arrested 1,536 suspects. Among those detained by the police, 199 were incarcerated.

Including the results of the first crackdown, a total of 1,249 cases were uncovered, 3,466 individuals arrested, and 367 detained. The police exposed 13 capital-free gap investment organizations that owned approximately 11,680 properties nationwide and 21 jeonse loan organizations that embezzled 78.8 billion KRW.

In addition to existing illegal brokers, 110 individuals including operators of online real estate brokerage platforms who abetted jeonse fraud and appraisers who deliberately inflated real estate prices to help embezzle deposits or loans were also apprehended by the police.

Notably, during this second crackdown, the police applied charges of organizing criminal groups to 111 members of 10 jeonse fraud organizations and detained 48 of them. These organizations were found to have illicitly gained from 1.4 billion KRW to as much as 250 billion KRW through capital-free gap investments or jeonse loan fraud. The total amount embezzled by these 10 organizations reached 500 billion KRW.

One such group operated a real estate consulting office from October 2020 to October last year, conducting rental businesses targeting newly built officetels in the metropolitan area. They collaborated with sales agencies, licensed real estate agents, and consulting firms to carry out “simultaneous operations and capital-free gap investments,” embezzling 250 billion KRW in jeonse deposits from about 900 victims. The Guri Police Station in Gyeonggi arrested 19 individuals including rental business operators and detained 3 of them.

Meanwhile, the damage identified up to the second crackdown involved 5,013 victims and amounted to approximately 600.8 billion KRW. By age group, those in their 20s and 30s accounted for 57.9%, the highest proportion, and by housing type, multi-family houses (villas) and officetels made up 82.4%, representing the majority. The amount of damage per person was under 200 million KRW for 76.2%, the largest share.

Additionally, the police explained that during this second crackdown, they confiscated and preserved 17.27 billion KRW in criminal proceeds from jeonse fraud. This amount represents a 3,040% increase compared to the first crackdown. Of this, 14.99 billion KRW was confiscated and preserved from cases where charges of organizing criminal groups were applied, 1.2 billion KRW from forged private document cases, 980 million KRW from violations of the Real Name Real Estate Act, and 100 million KRW from obstruction of business cases. The police are also proceeding with preservation procedures for real estate worth approximately 50.9 billion KRW.

Furthermore, the National Police Agency is continuing investigations into additional participants in existing jeonse fraud cases and, to focus on investigations requested by the Ministry of Land, Infrastructure and Transport regarding jeonse fraud, has decided to extend the “Second Nationwide Special Crackdown on Jeonse Fraud” with the Ministry and the Prosecutor’s Office until December 31 of this year.

Yoon Hee-geun, Commissioner of the National Police Agency, stated, “We have mobilized all investigative capabilities to eradicate jeonse fraud that threatens the livelihood of the people,” and added, “Through joint crackdowns with the Ministry of Land, Infrastructure and Transport and the Prosecutor’s Office, we will root out jeonse fraud by the end of the year.”