"Can Live Longer in Prison"... 7.3 Billion Won Jeonse Fraud Gang Led by Gangsters Sentenced to Prison

Victims Fear Retaliation, Unable to File Complaints

Four individuals were sentenced to prison for orchestrating a multi-billion-won jeonse fraud using organized crime members. It was confirmed that they primarily targeted young adults starting their careers in society.

Former Gangster Landlords Sentenced to 3 to 7 Years in Prison

On the 19th, Judge Park Sook-hee of the Daejeon District Court Criminal Division 7 sentenced former gangster landlord A (46) and brokerage assistant B (39), who were tried for fraud charges the previous day, to seven years in prison each. Another former gangster landlord C (41) and building owner D (44) were sentenced to four and three years in prison, respectively.

Judge Park stated, "This is a serious crime that disrupts the sound order of the housing market and defrauds tenants of their entire deposit, which is equivalent to their life savings, shaking their livelihood to the core. Severe punishment is necessary." He added, "Some buildings are currently under auction, but the damages have not yet been recovered, and considering that the victims are petitioning for severe punishment."

Regarding D, the judge added, "Although his role was significant and the profits he gained were substantial, this was considered a mitigating factor because he is involved in a consecutive offense with a previously confirmed sentence for special injury." Under criminal law, a consecutive offense refers to a crime committed before the sentence for a previous crime, punishable by imprisonment or higher, is finalized. If a sentence is confirmed for some of the offenses, the remaining offenses may have their sentences reduced or waived. D was previously arrested for planning a 4.1 billion won jeonse fraud and was sentenced to nine years in prison in the first trial.

“I Don’t Mind Spending 2-3 More Years in Prison,” They Joined the Crime... Defrauded 8.485 Billion Won from 84 People

Earlier, from September 2020, A and B purchased multi-family houses in Sinseong-dong, Yuseong-gu, Goejeong-dong, Seo-gu, and Yongjeon-dong, Dong-gu, under A’s name through "zero-capital gap investment" (a method of acquiring housing ownership without spending any money). These buildings were so-called "empty jeonse" properties, where the sum of mortgage loans and jeonse deposits exceeded the purchase price, making it highly likely that deposits could not be returned on time.

However, they deceived tenants by saying, "Most of the contracts are monthly rent, and these are safe buildings without senior deposits, so there is no need to worry," and embezzled 5.965 billion won in deposits from 72 people until April last year.

The four, including A, are also accused of buying a newly built multi-family house in Jung-ri-dong, Daedeok-gu, constructed by D, under C’s name from December 2021 to February 2022, and deceiving tenants in the same way to embezzle 1.42 billion won in deposits from 12 people, totaling 8.485 billion won from 84 people.

B learned this method from his cousin D and proposed the crime to A, saying, "Acquire multi-family houses with zero capital, pay interest for only two years, then push it to auction, bankrupt the owner, and pocket hundreds of millions of won." It was confirmed that A, C, and other organization members joined, saying, "We don’t mind spending 2-3 more years in prison."

Targeting Young Adults with Little Real Estate Contract Experience... Victims Hesitated to Report Due to Fear of Retaliation from Gangster Landlords

The victims of their fraud were mostly young adults with little real estate contract experience, such as university students, newlyweds, and young professionals. They exploited the fact that tenants of newly built multi-family houses had difficulty knowing the senior deposit details of other households, committing crimes by hiding the fact of jeonse contracts or underreporting the amount of senior deposits.

Those who put A and C forward as landlords reassured tenants by saying, "Although the landlord is young, he is wealthy enough to buy a luxury apartment in cash and drives a foreign car, so there is no need to worry about the deposit." Tenants later found out that the landlord was a gangster but hesitated to report due to fear of retaliation. When the prosecution began investigating, the victims testified about the damages.