Court: "Doubtful of Compliance Awareness"... Sentences 15 Years Imprisonment
The main perpetrator of the so-called 'Suwon family jeonse fraud,' accused of a jeonse fraud amounting to around 70 billion KRW, was sentenced to the maximum prison term of 15 years.
According to Yonhap News on the 9th, Judge Kim Sujeong of Suwon District Court Criminal Division 11 sentenced Jeong Mo, who was detained and indicted on charges including fraud, to 15 years in prison and ordered a fine of 103.6 million KRW. His accomplice, his wife Kim Mo, was sentenced to 6 years in prison, and their son, an appraiser, was sentenced to 4 years in prison. Under the Criminal Act, the statutory maximum sentence for fraud is up to 10 years in prison. However, when multiple crimes are involved, the court can impose a combined sentence applying the aggravation for concurrent offenses, allowing the court to sentence up to 15 years in prison.
Judge Kim pointed out, "The defendant recklessly expanded a large-scale rental business using a gap investment method without any significant equity capital, failing to accurately grasp his own assets or debts, and conducted the business abnormally in a haphazard manner without even a single accounting staff to manage funds or rental expenses." He added, "The reason there were no problems for a while seems to be thanks to the low-interest rate environment and the rising real estate trend. The defendant did not prepare any risk management measures against economic downturns or policy changes that could be unfavorable to the rental business. Where else do people run a business like this using other people's money?"
Judge Kim also said, "Rental deposit money is almost equivalent to the entire property of ordinary citizens. It is directly related to housing stability. One of the victims apparently took their own life after the defendant's crime was revealed." He continued, "The defendant invested tens of billions of won of victims' deposits in land purchases in Yangpyeong-gun, solar power projects, and franchise businesses without a meticulous plan, failed to gain any significant profit, and did not recover the invested funds."
He further stated, "In addition, the defendant spent at least 1.3 billion KRW on game items for personal hobbies, used corporate cards to cash out 1.5 billion KRW starting from 2022 when the rental business began to face difficulties, and there are signs of asset concealment. It is doubtful whether the defendant has any sense of legal compliance, and strict punishment is appropriate," explaining the reasons for sentencing.
However, the court acquitted Jeong and his son on charges of violating the Appraisal Act (appraising rental buildings at prices higher than market value), stating, "Although the prices were set higher than the market price, there is insufficient evidence to convict for false appraisal considering that it is unclear by how much the prices exceeded the market value and that the appraisal went through the appraisal firm's review."
About ten victims of the Jeong family's fraud attended the court to observe the sentencing trial. Immediately after the sentence was announced, one victim shouted at the defendants, "Go to hell," but was restrained by court security officers.
Meanwhile, Jeong and others are accused of acquiring about 800 houses in the Suwon area under the names of family members and rental corporations from January 2021 to September last year, and defrauding 51.1 billion KRW in jeonse deposits from 511 tenants. Despite having debts exceeding 70 billion KRW in loans at the time, Jeong reportedly continued rental contracts in a rollover manner without a concrete fund management plan.
The prosecution initially arrested and indicted Jeong and others in December last year on charges of defrauding 22.5 billion KRW in deposits from 213 people, but as the investigation progressed and the scale of damage increased, they filed two additional indictments. Jeong's son was also indicted on charges of participating in the crime by appraising rental buildings at prices higher than market value at his father's request and working as the head of a rental company since March last year.
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