Supreme Court Upholds 7-Year and 3.5-Year Sentences for Couple in 17 Billion Won Jeonse Fraud... Consecutive Heavy Sentences Handed Down

Supreme Court Upholds 13-Year Sentence for Daegu Fraudster Involved in 8.8 Billion Won Jeonse Scam
Prosecution Sought Average of 11 Years; Courts Handed Down 7.7 Years on Average

The Supreme Court has consecutively handed down prison sentences to members of a jeonse fraud ring who stole security deposits from ordinary citizens.

Supreme Court, Seocho-gu, Seoul. Photo by Yonhap News

According to the Supreme Court on May 16, the Supreme Court’s Third Division (Presiding Justice Lee Sukyeon) upheld the lower court’s verdict, sentencing a couple involved in jeonse fraud to seven years and three years and six months in prison, respectively, for defrauding approximately 17 billion won. The court stated, "There was no error in the lower court’s judgment that violated the rules of logic or experience."

The couple was indicted on charges of acquiring about 17 billion won in security deposits from 145 people by purchasing 268 officetels in the Dongtan New Town area between 2020 and early 2023 using a "zero-capital gap investment" method. They focused on buying properties where the jeonse price was higher than the purchase price. The Supreme Court also sentenced a realtor couple, who were indicted for conspiring with the main perpetrators, to seven years and four years in prison, respectively. The realtor couple assisted in the lease contracts while concealing the fact that the main perpetrators were engaging in so-called "security deposit Ponzi schemes."

The Supreme Court’s Second Division (Presiding Justice Oh Kyungmi) also upheld a lower court ruling sentencing a man in his 60s to 13 years in prison for committing jeonse fraud totaling approximately 8 billion won in the Daemyeong-dong area of Nam-gu, Daegu. As a result of this case, one victim even lost their life.

This individual, who owned 12 studio apartments, was indicted on charges of failing to return 8.8 billion won in security deposits to 104 tenants between December 2020 and March of last year. One woman in her 30s, who was deceived and failed to recover her 84 million won deposit after her contract ended, died by suicide in May of last year, leaving behind a note.

There have been a series of heavy sentences and sentencing recommendations for jeonse fraudsters. In September of last year, the Supreme Prosecutors’ Office sought 15-year prison terms for 20 jeonse fraudsters, and in total, recommended sentences of seven years or more for 95 individuals. Of these, 25 received sentences of 10 years or more. The average recommended sentence was 11 years, while the courts handed down an average sentence of 7.7 years. Since 2022, prosecutors, the Ministry of Land, Infrastructure and Transport, and the National Police Agency have been conducting an indefinite, government-wide special crackdown on jeonse fraud. There are as many as 99 prosecutors dedicated exclusively to jeonse fraud cases.