A man in his 40s has been arrested for committing a multi-billion won jeonse fraud using a zero-capital gap investment scheme, purchasing buildings with jeonse deposits without any personal capital.
The Anti-Corruption and Economic Crime Investigation Unit of the Gyeongnam Provincial Police Agency announced on the 13th that they have arrested and referred Mr. A, a man in his 40s, on charges of fraud.
According to the police, Mr. A is accused of defrauding about 5.3 billion won in jeonse deposits from 70 tenants in the Gimhae area.
It was found that he used land purchased with borrowed money from an acquaintance as collateral to build houses, then bought multi-family housing with the deposits received from leasing out these buildings.
From September 2015 to July 2023, Mr. A newly built or acquired 17 multi-family buildings, totaling 195 units.
Mr. A did not invest any personal capital, and even though he had neither the intention nor the ability to return the jeonse deposits, he still collected them from the victims.
Most of the victims are believed to be young people in their 20s and 30s who are unfamiliar with systems such as jeonse deposit insurance or leasehold registration.
Some victims have left their homes without getting their deposits back, while the majority are reportedly still residing without having received their money.
The police also investigated whether Mr. A colluded with licensed real estate agents but found no significant evidence of criminal involvement.
Additionally, in cooperation with local governments, authorities provided information to victims about financial support and protection measures under the Special Act on Jeonse Fraud Victim Relief.
The Gyeongnam branch of the Korea Association of Realtors was sent an official letter requesting that they provide detailed explanations of property values during lease contract signings.
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