Police Receive Complaint... Most Victims Are Elderly
A construction company CEO in Busan disappeared after signing contracts promising ownership of new apartments in exchange for ownership of old houses, prompting a police investigation.
According to Yonhap News on the 11th, citing the Busan Geumjeong Police Station, an A development company is scheduled to be investigated on charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.
The A development company is accused of signing contracts with eight residents of a house in Guseo-dong, Geumjeong-gu, Busan, several years ago, promising ownership of new apartments in exchange for ownership of their houses, but then disappearing without transferring ownership.
According to the police, the company’s CEO, Mr. B, had transferred all ownership rights of the apartments to a trust company to secure construction loan funds. When the sales of the apartments under construction did not proceed smoothly, Mr. B failed to repay the loan and disappeared. Consequently, the trust company auctioned off the completed apartments last year, and ownership has since completely changed.
The victims filed a complaint with the prosecution against Mr. B on charges of breach of trust. So far, eight victims have been identified, most of whom are over 80 years old and are reportedly in distress. Two of the victims are known to have already passed away.
The remaining elderly victims are currently living in temporary shelters. It is reported that they face uncertainty about when they might be evicted.
A legal official told Yonhap News, "This is a case where elderly people suffered damages in a development project without institutional protective measures, rather than redevelopment or reconstruction under the Urban and Residential Environment Improvement Act." The prosecution is expected to take over the case and launch a full-scale investigation.
Meanwhile, starting with the Villa King case in Michuhol-gu, Incheon in 2022, which caused hundreds of billions of won in damages, nationwide jeonse fraud has shaken the country. Over the past two years, approximately 2.5 trillion won in property damage has occurred. Among the roughly 16,000 victims, at least 11 have died, highlighting the severity of the impact.
Although the ‘Special Act on Jeonse Fraud Victims’ was enacted in June 2023, the aftermath of jeonse fraud in the housing rental market remains ongoing. Even after the enactment of the special law, new types of fraud continue to cause distress to tenants.
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