Jeonse Fraud 'Geonchukwang' Sentenced to 15 Years in Prison... "No Effort to Restore Damage"

The prosecution has sought a heavy sentence against the so-called 'Geonchukwang' (Construction King), who is accused of orchestrating organized jeonse fraud centered around the Michuhol-gu area in Incheon.

On the 17th, at the sentencing hearing presided over by Judge Oh Gi-du of the Incheon District Court Criminal Division 1, the prosecution requested 15 years imprisonment for A (62), who was detained and indicted on charges including fraud. The prosecution also sought prison terms ranging from 7 to 10 years for nine accomplices, including licensed real estate agents and brokerage assistants, who were indicted on the same charges.

The prosecution explained the reason for seeking the maximum sentence of 15 years imprisonment, stating, "A has not made efforts to restore the victims and denies the crime, claiming that the business became difficult due to external factors such as the real estate market downturn, showing no remorse whatsoever."

A and others were brought to trial on charges of embezzling 45.3 billion won in jeonse deposits from tenants for 563 apartment and villa units in the Michuhol-gu area of Incheon from March 2021 to July 2022.

A is also charged with embezzlement (violation of the Act on the Aggravated Punishment of Specific Economic Crimes) for diverting 4 billion won of construction payments for newly built apartments from a construction company in January 2018 to secure the Donghae Mangsang District project site, totaling 11.7 billion won in company funds. Investigations revealed that he used the embezzled construction payments to cover jeonse deposits, which led to auctions of his owned houses and failure to pay jeonse deposits.

Relatedly, from February to May last year, four victims who failed to recover their jeonse deposits from A’s group died by suicide in succession.

Apartment Victimized by Jeonse Fraud in Michuhol-gu, Incheon
Photo by Yonhap News

For the first time in a domestic jeonse fraud case, the prosecution applied the charge of 'criminal organization formation' against A and his group. The prosecution believes that A colluded with licensed real estate agents and others to systematically commit jeonse fraud. Investigations found that A operated multiple brokerage offices under the names of real estate agents and assigned them to exclusively handle brokerage of houses he owned.

He referred to himself as chairman and established a 'brokerage team' overseeing directors and each brokerage office. Each office had hierarchical positions such as general manager, manager, deputy manager, and team leader, with assigned roles. A also managed the organization through weekly meetings and other gatherings, differential salaries based on rank, performance bonuses, and a promotion system.

Since 2009, A purchased land under the names of licensed real estate agents and brokerage assistants, then built small-scale apartments and villas through a comprehensive construction company he operated. He expanded his real estate holdings by constructing multi-family housing using jeonse deposits and mortgage loans, currently owning a total of 2,700 units across Incheon and Gyeonggi Province, earning him the nickname 'Geonchukwang' (Construction King).