Another Jeonse Fraud... 9 Billion Won Swallowed Through Officetel Gap Investment

1 Person Detained and Prosecuted, 12 People Prosecuted Without Detention

A group involved in jeonse fraud in the Seoul and Gyeonggi areas, embezzling about 9 billion KRW in jeonse deposits and bank loans, has been brought to trial.

On the 21st, the Seoul Southern District Prosecutors' Office (Southern Prosecutors' Office) announced that it had arrested and indicted a woman in her 60s, A, a no-capital rental business operator, on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud), obstruction of business, and forgery of private documents. Twelve accomplices, including 11 people who provided officetel tenant names and recruited them, and one licensed real estate agent who forged lease contracts, were indicted without detention.

From July 2018 to February last year, they acquired 10 officetels through no-capital gap investment, falsely prepared lease contracts, and based on these, applied for jeonse housing loans at five banks, obstructing loan screening operations and embezzling about 2 billion KRW in loan funds. They are also accused of signing jeonse contracts for 15 officetels with 15 tenants from May 2019 to August last year without the intention or ability to return the deposits, embezzling about 3.4 billion KRW in jeonse deposits. Furthermore, from October 2018 to November last year, they forged monthly rent contracts in the tenants' names and applied for secured loans, obstructing loan screening operations at seven financial institutions and embezzling about 3.6 billion KRW in secured loan funds.

The prosecution first confirmed the rights relationships such as priority repayment rights, then guided the jeonse fraud victims on specific methods to secure deposits, and introduced free litigation support from the Korea Legal Aid Corporation and the Housing and Urban Guarantee Corporation (HUG). Regarding the 30 officetels used by the defendants in the crimes, measures were taken to recover actual damages and confiscate criminal proceeds, including requesting seizure preservation before indictment.

A prosecution official said, "We will do our best to maintain the prosecution so that the defendants receive strict sentences commensurate with their crimes, and we will make every effort to severely punish crimes that undermine the livelihoods of ordinary people and support the victims."