Regional Housing Association Officials Who Crushed the Dream of Owning a Home Deny Charges in First Trial

Suspected of Embezzling Approximately 23.9 Billion KRW in Deposits from 477 People

[Asia Economy Reporter Yoo Byung-don] Those involved in the Guro-dong Regional Housing Association corruption case, accused of embezzling hundreds of billions of won from over 400 ordinary citizens, denied all charges at their first trial.

The Criminal Division 13 of the Seoul Southern District Court (Presiding Judge Lee Sang-ju) held the first hearing on the 6th for three defendants, including former association promotion committee chairman Mr. A (79) and the representative of the business agency Mr. B (59), who were indicted on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.

At the trial, the defense attorneys for Mr. A and Mr. B stated, "We deny all allegations related to the fraud in recruiting association members," and added, "We also deny all charges related to breach of trust under the Specific Economic Crimes Act, including the improper expenditure of 1.64 billion KRW for land acquisition service fees, 410 million KRW in loans to advertising companies, and unpaid taxes."

They further argued, "We deny the allegations of embezzlement by Mr. B alone, including the misappropriation of 3.5 billion KRW under the name of redevelopment investment funds and 750 million KRW in advertising payments, as well as the embezzlement of 31 million KRW for horse racing betting tickets," and stated, "We also deny violations of the Commercial Act and falsification and use of electronic records."

However, Mr. A admitted to charges related to violations of the Housing Act, specifically for failing to respond without justifiable reason to certified mail requests for viewing and copying land use consent forms and deposit/withdrawal statements, which were part of his solo offenses.

Meanwhile, the defense attorney for Mr. C (59), the representative of the association member recruitment agency who was also indicted, stated that they would express their position at the next hearing, citing that they had not received copies of the records.

They are accused of embezzling a total contract amount of approximately 23.9 billion KRW from 477 victims between November 2016 and September 2019.

At that time, the regional housing association was in a situation where it was difficult to proceed with the project in a short period due to lack of consent and support from landowners. However, it was investigated that they falsely promoted the project as if 60-80% of land use rights had been secured and that occupancy would be possible by 2021.

To obtain approval for establishing a regional housing association, the condition of securing land use rights for at least 80% of the housing construction site area must be met, but it was revealed that only 20-30% of the land use rights had actually been secured.

Additionally, Mr. A and Mr. B are also accused of causing approximately 2.3 billion KRW in damages to the promotion committee and obtaining financial benefits by submitting documents with falsely stated land consent rates to the trust company to receive land service payments.

Furthermore, Mr. B faces additional charges of arbitrarily using about 4.2 billion KRW in business agency fees and project funds received from the trust company, withdrawn by check, for investment in a real estate development project of an acquaintance.

The police, who received complaints from the victims in July last year, transferred the case to the Seoul Southern District Prosecutors' Office in July this year after one year. The prosecution decided to indict after conducting searches of the trust company, tracing funds, and investigating related parties.

Their second trial is scheduled for 11:10 AM on the 8th of next month.

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