"Tenant Sheds Tears of Blood" Tenant Takes Up Knife Against Jeonse Fraudster Who Embezzled Hundreds of Billions

Courts Hand Down Heavy Sentences for Jeonse Fraud Offenders
Determined to Impose Strict Punishment as Multiple Victims Continue to Suffer

Courts are handing down heavy sentences for jeonse fraud crimes, which have even been called "economic murder." There is a clear intention to impose strict punishment, especially since the crimes target economically vulnerable groups such as young people and newlyweds.

Recently, Judge Seo Young-woo of the Seoul Southern District Court Criminal Division 12 sentenced housing rental business operator Gu Mo (55) to 10 years in prison and his accomplice Byun Mo (54) to 6 years in prison on charges including fraud. 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 had contracted multi-family one-room buildings in Yeongdeungpo-gu, Geumcheon-gu, and Dongjak-gu, Seoul, from February 2017 to October 2023.

Judge Seo stated, "For most residents, the jeonse deposit is their most important asset and is deeply connected to their basic housing and living needs, so it is necessary to strictly punish related crimes," adding, "Even looking at the individual crimes, the number of victims is very large and the amount of damage is significant."

Kim Mo, the main perpetrator of the so-called "Three Mothers Jeonse Fraud" case, who colluded with a sales agency to carry out hundreds of billions of won worth of jeonse fraud through "empty jeonse" in the metropolitan area, was also sentenced to 15 years in prison in the second trial last month on the 12th. Kim was indicted on charges of causing approximately 79.5 billion KRW in damages to 355 tenants by purchasing about 500 newly built villas in Gangseo-gu and Gwanak-gu, Seoul, using the names of his two daughters and leveraging jeonse deposits from 2017 for about two years. The second trial court said, "Many of the victims were young adults starting their careers, and the defendants seriously threatened the housing stability of victims whose deposits were most or all of their assets."

In April last year, the second trial court sentenced Shin Mo, the head of a real estate consulting firm behind the so-called "Villa King" who died while owning hundreds of villas in Gangseo-gu, Seoul, to 8 years in prison, and the sentence was confirmed as is. Shin was charged with embezzling 8 billion 30 million KRW from 37 tenants by purchasing multi-family houses through "zero-capital gap investment" using multiple people's names from July 2019 to August 2020.

According to the Ministry of Land, Infrastructure and Transport's Jeonse Fraud Victim Support Committee, from the committee's launch on June 1, 2023, to January 5 of this year, a total of 15,486 reports of jeonse fraud damage were received, of which 10,944 were recognized as actual damage cases. Analysis by the Ministry showed that 48.16% of victims were aged 30 to under 40, and 24.79% were aged 20 to under 30, meaning more than 7 out of 10 victims are young people. The scale of damage continues to grow, and the suffering of victims remains ongoing.

Lawyer Lee Kang-hoon (Head of the Tenant114 Center at the Housing Tenant Legal Support Center) said, "Courts are imposing heavy sentences within the maximum legal range," but pointed out, "There is a limit to increasing sentences for concurrent offenses that occur one by one, so when revising the criminal law in the future, discussions on sentencing methods are necessary." Lawyer Park Sang-heum of the law firm Wooridle also said, "Jeonse fraud is a serious crime that destroys a family's livelihood and ruins a person's entire life, so it should be punished more severely."