"34th Floor Hangang View Apartment" Dream Home Snatched by 40 Billion Won Sales Fraud [Economic Crime 24 Hours]

Collected contributions from 403 victims and 'embezzled'
Recruited union members in the Seoul Oksu-dong area for 4 years

A high-rise apartment with a Han River view that anyone has dreamed of at least once. Especially if it is right in the heart of downtown Seoul, it is only natural to desire it. Mr. Jinyoungsoo (pseudonym), in his 50s, was excited about preparing a home to live with his family. He was happy every day thinking about living in a station-area apartment located just 3 minutes from the subway station. However, Mr. Jin's wish was never fulfilled.

Mr. Jin saw a recruitment post for regional housing association members for a high-rise apartment to be built in the Oksu-dong area of Seongdong-gu, Seoul, in July 2017. The post stated that a complex of 592 households would be built with four buildings, each with 5 basement floors and 34 above-ground floors. At that time, the association launched a large-scale promotion highlighting the '3-minute distance from Oksu Station' and 'Han River view.' After visiting the model house set up in Hannam-dong, Yongsan-gu, Mr. Jin joined the regional housing association by paying nearly 200 million KRW.

From April 2017 to June 2021, a total of 403 members were recruited. The amount paid by the members as their share reached a whopping 41.2 billion KRW. The members had no doubts because they signed a 'Safety Guarantee Certificate' promising a full refund of the share if the project failed.

However, the actual area was classified as a Type 2 General Residential Area, where apartments over 7 floors could not be built. The association had hardly secured the land needed for the project but falsely promoted to members that over 75% of the land purchase was completed. Moreover, they had not even obtained approval from the district office for recruiting new members.

Upon realizing these facts late, the members reported the damage to the police, and as complaints piled up, the Gangnam Police Station in Seoul launched an investigation on September 15, 2021. The main suspects revealed by the police investigation were three people: Mr. Han (75), the head of the regional housing association; Mr. Park (63), the association auditor; and Mr. Ryu (59), the representative of the sales agency.

Notably, Mr. Ryu had already been arrested for a similar sales fraud case in Guro-gu. He was sentenced to 30 years in prison in the first trial at the Seoul Southern District Court and 23 years in the second trial at the Seoul High Court.

On the 26th of the same month, the police arrested Mr. Han and Mr. Park on charges of fraud and breach of trust, and six employees of the sales agency were also booked without detention on fraud charges. On October 5, 2023, these suspects were all transferred to the prosecution.

The Criminal Division 8 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Hong Wanhee), which took over the case, indicted Mr. Han and Mr. Park in custody and the other suspects without detention. The first trial is currently underway at the Seoul Central District Court. Considering that they deceived members using methods similar to the Guro-gu regional housing association fraud case, it is highly likely that these suspects will receive heavy sentences.