[Exclusive] Major Strengthening of Jeonse Fraud Punishments... Ruling Party Proposes Bill for Up to 15 Years Imprisonment

Strict Punishment for Malicious Jeonse Fraud... 'Eliminate Fines'
Assemblyman Jung Woo-taek: "Prison Sentences Over One Year Needed as Strong Warning"

Real estate stock photo / Photo by Mun Ho-nam munonam@

[Asia Economy Reporters Jang Sehee and Oh Gyumin] A legislative amendment is being pushed to impose mandatory imprisonment on jeonse fraudsters who cause tenants to suffer.

On the 5th, Jeong Woo-taek, a member of the National Assembly's Public Administration and Security Committee from the People Power Party, introduced a partial amendment to the Criminal Act that punishes criminals who deceive people to obtain rental deposits or cause a third party to obtain rental deposits with imprisonment from 1 year to 15 years. The bill was co-sponsored by 12 lawmakers including Lee Jong-bae, Lee Tae-gyu, Kang Ki-yoon, and Ji Seong-ho. ▶Refer to Asia Economy July 28 '[Exclusive] Jeonse fraud victims concentrated among low-income households in multi-family housing with amounts under 50 million won'

Since jeonse fraud mainly affects youth and low-income groups, the core of the bill is to eliminate fines and strengthen punishment through imprisonment. Under the current Criminal Act Article 347 on fraud, offenders face imprisonment of up to 10 years or fines up to 20 million won, and for fraud crimes using computers, imprisonment of up to 10 years or fines up to 20 million won are also stipulated.

Rep. Jeong said, "Jeonse fraud is a vicious crime that causes irreparable damage to youth and low-income people," adding, "It is necessary to send a strong warning through imprisonment of at least one year."

Typical jeonse fraud cases include ▲zero-capital or gap investment ▲non-return of deposits such as "empty can jeonse" ▲false disclosure of real estate rights ▲unauthorized contracts pretending to be the actual owner ▲contracts exceeding the scope of delegation ▲false guarantees or insurance ▲illegal brokerage. Earlier, the Ministry of Land, Infrastructure and Transport announced measures to prevent jeonse fraud on the 1st, but some measures were criticized for lacking enforceability and effectiveness.

The prosecution has set a policy to detain and investigate in principle when jeonse deposit fraud is planned and active. The police also believe that aggravated punishment is necessary for organized jeonse fraud.

The courts are also showing signs of change. In July, the Daejeon District Court Seosan Branch sentenced five defendants, including a landlord who pocketed about 1 billion won through "empty can jeonse" fraud, to imprisonment. The landlord received 5 years in prison, while three construction workers and a licensed real estate agent who were also indicted received prison terms ranging from 1 to 2 years.

The court stated, "Due to the defendants' crimes, the victims suffered losses by not being able to recover their rental deposits," adding, "As a result, their housing stability was threatened, and they experienced mental and economic distress after losing most of their assets." In the so-called Daegu "empty can jeonse" case involving about 50 victims and 3.5 billion won in damages, landlords were sentenced to imprisonment in the first trial in April last year, but real estate agents received fines.

Lee Yun-ho, Chair Professor of Police Science at Korea Cyber University, said, "Property crimes including jeonse fraud were committed because the benefits outweighed the losses," adding, "It is necessary to ensure that punishments, which can be seen as costs or losses caused by crimes, are certain, swift, and strict, and that imprisonment and other severe penalties are imposed."

He continued, "Tenants are vulnerable members of society who should be protected, while perpetrators who kidnap and extort should be heavily punished," adding, "If more money than the amount defrauded is confiscated or corresponding penalties are increased, crimes will not be committed."

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