Incheon Songdo M2 District Regional Housing Association Fraud of 53 Billion Won... Six Including Lawyer Indicted

Incheon Songdo International City District 1 M2 Zone [Provided by Incheon District Prosecutors' Office]

[Asia Economy Reporter Park Hyesook] A lawyer and a former head of a sales agency have been brought to trial on charges of embezzling approximately 53 billion KRW in contributions from members, including homeless individuals, by recruiting them through false advertisements during the promotion of a local housing cooperative (Jijutaek) project in Songdo International City, Incheon.

The Public Officials and Corporate Crime Division of the Incheon District Prosecutors' Office (Chief Prosecutor Hadammi) on the 12th indicted A (51), a lawyer and former representative of a business agency, on charges of fraud, embezzlement, and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, and five others including B (47), former head of a sales agency, without detention.

A and others are accused of establishing three local housing cooperative promotion committees in the M2 district of Songdo International City 1st Zone, Yeonsu-gu, Incheon, from April 2016 to July of the following year, and embezzling 53.49 billion KRW in contributions from 1,481 cooperative members recruited through false advertisements.

They selected companies they operated as the business agency, permit service agency, and sales agency respectively, and deceived cooperative members by falsely claiming that the land acquisition rate was over 80%.

However, at that time, the land acquisition rates in the three sites within the M2 district were only 16% for Zone 1, 15% for Zone 2, and 0% for Zone 3.

Moreover, to promote the local housing cooperative project on the site, five roads had to be removed, but the Incheon Free Economic Zone Authority, which had jurisdiction, showed a negative stance, making it impossible for the project to proceed properly.

Nevertheless, A and others were found to have falsely advertised that the district unit plan could be changed to remove the roads.

It was also revealed that A embezzled 8.8 billion KRW out of 16.1 billion KRW deposited into the company account as business agency service fees from cooperative members' contributions and used it as personal investment funds.

The former head (50) of the permit service agency, who was indicted alongside A, also embezzled 2.6 billion KRW using the same method and spent it on purchasing apartments and vehicles.

B was investigated for embezzling 3 billion KRW deposited into the company account under the name of business agency service fees after establishing new business and sales agencies from November 2018 to June this year, and using it for personal living expenses after taking over the local housing cooperative project in Zone 1.

Ultimately, Zones 2 and 3 did not even receive approval for cooperative establishment, and Zone 1 could not remove the roads, reducing the project scale by about half compared to the original plan.

The local housing cooperative project is where local residents who meet certain qualifications, such as being homeless, form a cooperative themselves to purchase land and build houses.

A prosecution official stated, "The defendants deceived people by claiming that changes to the district unit plan, including road removal, were possible and that more than 80% of the land had already been secured, making the project likely to succeed in a short period," adding, "Homeless people dreaming of owning a home were harmed."

This content was produced with the assistance of AI translation services.