The Main Perpetrator of the 13.8 Billion Won Jeonse Fraud in Capital-Free Gap Investment Sentenced to 10 Years in First Trial

Accomplice Sentenced to 6 Years in Prison

A group that committed a jeonse fraud worth 13.8 billion KRW through zero-capital gap investment was sentenced to heavy punishment in the first trial.

On the 15th, Judge Seo Young-woo of the Seoul Southern District Court Criminal Division 12 sentenced Gu (55), a housing rental business operator indicted on charges including fraud, to 10 years in prison. Co-defendant Byeon (54) was sentenced to 6 years in prison.

The court stated, "For most residents, the jeonse deposit is their most important asset and is deeply related to their basic livelihood, so it is necessary to strictly punish related crimes," adding, "Considering the individual crimes, there are a very large number of victims and the amount of damage is substantial."

It further added, "In particular, the zero-capital gap investment method used by the defendants increases their own assets at the expense and risk of others, and when real estate prices fall, the damage is entirely passed on to the tenants, so strict accountability is necessary."

They were arrested and indicted last July on charges of embezzling 13.5 billion KRW in jeonse deposits and 300 million KRW in jeonse loan funds from 155 victims who contracted multi-family one-room buildings in Yeongdeungpo-gu, Geumcheon-gu, and Dongjak-gu, Seoul, from February 2017 to October 2023.

They carried out fraudulent acts by offering so-called "empty can jeonse" contracts at prices higher than the building's value or by using fake tenants to cover funds.