False Reporting of Transaction Prices, Suspected Tax Evasion, etc.
3,492 Cases Reported by Local Governments, 857 by the National Tax Service, 27 by the Financial Services Commission
The Ministry of Land, Infrastructure and Transport announced on the 1st that, as a result of conducting a total of four planned investigations to eradicate Jeonse fraud, it detected 4,137 suspicious Jeonse fraud transactions and referred 1,414 suspects and related persons to the National Police Agency for investigation.
In addition, 3,492 cases were reported to local governments for violations of the Real Estate Transaction Reporting Act, such as false reporting of transaction prices and refusal to submit data; 857 cases were reported to the National Tax Service for suspected tax evasion; and 27 cases were reported to the Financial Services Commission and others for misuse of loans for purposes other than intended.
Local governments in charge impose administrative sanctions such as fines when illegal acts are confirmed, and the National Tax Service conducts tax audits when tax evasion suspicions such as disguised gifts are identified. The Financial Services Commission, Financial Supervisory Service, and Ministry of the Interior and Safety plan to take measures such as loan recovery for violations of loan regulations if misuse of loan funds is confirmed.
The Ministry of Land, Infrastructure and Transport conducted planned investigations starting from January 2023, initially targeting villas and officetels in the Seoul metropolitan area where Jeonse fraud damage was concentrated, and expanded the target areas nationwide. From March 2024, investigations included potentially risky transactions as well.
A Ministry official stated, "In this year's investigation, in addition to the existing methods, we attempted transaction analysis by additionally utilizing an artificial intelligence (AI)-based anomaly transaction detection model, resulting in the detection of more suspicious Jeonse fraud transactions."
Among the suspects referred by the Ministry of Land, Infrastructure and Transport to the National Police Agency so far, the largest group by status is licensed real estate agents (488 persons, 34.5%), followed by lessors (429 persons, 30.3%), building owners (188 persons, 13.3%), and sales/consulting agents (138 persons, 9.8%).
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