Increasing 'Children' through Fake Remarriage... Rising Fraudulent Applications Amid Housing Subscription Frenzy

[Image source=Yonhap News]

[Asia Economy Reporter Lee Chun-hee] As the real estate market overheats, cases of not only false address registration but also sham marriages and divorces to win housing subscription have been uncovered.

The Ministry of Land, Infrastructure and Transport announced on the 4th that it detected 197 suspected cases of fraudulent subscription, including false address registration, trading of subscription savings accounts, and transfer of subscription qualifications, as well as 3 suspected cases of illegal supply by project operators, following on-site inspections of housing complexes sold in the first half of last year, and has requested investigations.

This on-site inspection targeted 21 nationwide complexes (▲3 in Seoul ▲4 in Incheon ▲7 in Gyeonggi ▲7 in other regions) where the Korea Real Estate Board's monitoring based on subscription competition rates and price trends suggested a high possibility of fraudulent subscriptions among complexes sold in the first half of last year.

A total of 197 cases of fraudulent subscriptions were detected through this inspection. By type, there were ▲134 cases of false address registration ▲35 cases of subscription savings account trading ▲21 cases of transfer of subscription qualifications ▲2 cases of sham marriages ▲5 cases of sham divorces. Not only subscribers but also subscription project operators were caught. In three sales projects, project operators illegally supplied a total of 31 houses by deliberately allowing ineligible applicants to win under the point system or arbitrarily supplying leftover units due to ineligibility or contract cancellations.

Cases of fraudulent subscription through sham marriages (Provided by the Ministry of Land, Infrastructure and Transport)

Looking at actual cases, various instances were uncovered. A woman in her 40s, Ms. D, succeeded in winning a general supply under the metropolitan area point system, which is said to be as difficult as threading a needle. This was thanks to having six dependents, including her spouse and five children. However, many of Ms. D's dependents were found to have been obtained through sham marriages.

One month before applying, Ms. D had only two children without a spouse, but she married a man in his 30s, Mr. E, who had three children, doubling her number of dependents. Mr. E and his children registered their residence at Ms. D's address just before the announcement of the resident recruitment, but after winning, they immediately moved back to their original residence and even proceeded with a divorce.

At the time of subscription, not only Ms. D and Mr. E's family but also Ms. D's cohabiting partner, Mr. F, in his 40s, were registered at the same address. This created a situation reminiscent of a melodrama, with a remarried couple, five children, and the wife's cohabiting partner?eight people?living together in a cramped 49㎡ (exclusive area) house.

The Ministry of Land confirmed these facts through on-site investigation and suspected sham marriage and false address registration to win the subscription, referring Ms. D and Mr. E for investigation on charges of violating the Housing Act.

Additionally, there was a case where a newlywed couple who had already won a special supply for newlyweds was found to have sham divorced to try to win again under the point system subscription. Under the current system, households that have already won special supply are ineligible for subsequent point system subscriptions, so it was understood that they attempted to win by divorcing on paper.

Cases of fraudulent subscription for special supply through false address registration (Provided by the Ministry of Land, Infrastructure and Transport)

Cases of applying for special supply through false address registration were also detected. Mr. A, a bereaved family member of a national merit recipient living in a provincial area, moved to a goshiwon (small lodging) in the metropolitan area just before applying and then applied for special supply. After winning, Mr. A moved his address back to the province immediately after signing the contract. The Ministry of Land regarded this as fraudulent subscription through false address registration and referred the case to the police for investigation.

There was also a case of illegal trading of subscription savings accounts. Ms. B, in her 40s, who lived with her husband and five children (six people in total) in a provincial area, moved to Mr. C's address in the metropolitan area and succeeded in winning under the point system. However, the Ministry of Land judged that Mr. C, not Ms. B, actually carried out all subscription procedures, falsely recorded that they were relatives despite not being so, and that Mr. C purchased the subscription savings account to exploit Ms. B's high points due to many dependents, and has also requested an investigation.

Evidence of illegal supply of houses by sales project operators was also uncovered. Methods such as manipulating the winner list or arbitrarily supplying leftover units due to contract cancellations were used. A total of 31 houses were illegally supplied in three sites through these methods.

One developer tolerated false information on subscription applications and even manipulated the list to allow those who submitted false information to win. Mr. G, who had no dependents, falsely recorded six dependents and won, but no separate verification process was conducted. Instead, Mr. G was managed as a winner under the lottery system, which does not require procedures, and even signed a contract. The Ministry of Land's on-site investigation confirmed that this developer caused as many as 11 fraudulent winners in the project. The Ministry regards the developer and all 11 winners as having conspired to illegally supply houses and has requested police investigations on charges of violating the Housing Act, while also asking local governments to take administrative actions.

The Ministry of Land has requested investigations by the end of last month for all 197 suspected fraudulent subscription cases and 3 suspected illegal supply cases detected in this inspection. If illegal subscription is proven, offenders face imprisonment of up to three years or fines up to 30 million won. If the profit gained from fraudulent subscription exceeds 10 million won, fines can be up to three times that amount. Housing supply contracts will be canceled, and subscription eligibility will be restricted for the next 10 years.

Han Sung-soo, Director of the Housing Fund Division, said, "We will strictly crack down on fraudulent subscription activities that threaten the soundness of the housing market and reduce opportunities for genuine home seekers without homes through active and continuous enforcement activities."

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