Fraud of Tens of Billions in Jeonse Funds by Homeless Youth... Prosecution Indicts Loan Fraud Gang

Fraud Charges Under Special Act
3 Including Mastermind Arrested and Indicted
Exploiting Non-Face-to-Face Document Review
Loans to False Leaseholders
Method of Distributing Loan Funds

On September 8 and 4, the Seoul Western District Prosecutors' Office indicted a group that systematically defrauded commercial banks of billions of won by abusing the monthly rent support system for young people.
Photo by Seoul Western District Prosecutors' Office

[Asia Economy Reporter Oh Gyumin] The prosecution has indicted a group that systematically defrauded commercial banks of tens of billions of won by abusing the Jeonse and monthly rent support system for youth.

The Seoul Western District Prosecutors' Office announced on the 6th that it had arrested and indicted three people, including the loan broker ringleader Mr. A, on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud), fraud, and attempted fraud in two rounds on September 8 and 4. Eleven others, including recruiters of tenants, were also indicted without detention on the same charges. According to the prosecution, from February to August, they are accused of embezzling 3.2 billion won in 33 cases by obtaining youth Jeonse deposit loans from commercial banks and attempting to embezzle 100 million won.

According to the prosecution's investigation, Mr. A and others exploited the fact that the "Youth Jeonse and Monthly Rent Support System" is conducted mainly through non-face-to-face document screening without a separate credit review process. They recruited fake landlords and tenants and used the method of creating false Jeonse contracts for the purpose of loans, not for actual residence. The Youth Jeonse and Monthly Rent Support System is a program under the support of the Financial Services Commission, where the Korea Housing & Urban Guarantee Corporation (HUG) fully guarantees loans, enabling commercial banks to provide low-interest loans to low-income, homeless youth.

The ringleader Mr. A and others advertised through social networking services (SNS) or acquaintances that "high-value loans can be obtained regardless of income," paying 5-10% of the loan amount to fake landlords. They either did not pay the loan amount at all to fake tenants or paid 10-40%, taking the remaining loan amount for themselves, leading the crime in this manner.

The prosecution began an investigation in June based on its own intelligence, securing evidence through analysis of over 50 bank accounts and communication data, as well as searches of residences. A prosecution official stated, "We will continue to conduct crackdowns on Jeonse loan fraud crimes that threaten people's livelihoods and cause damage to national finances."

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