'Villa King Also a Figurehead'... Police Arrest 78 Suspected Behind-the-Scenes Members

Purchased hundreds of properties with 'Mujabon Gap Investment', embezzled 8 billion won in deposits
Consulting firm CEO identified as accomplice of deceased 'Villa King'

[Asia Economy Reporter Choi Taewon] A gang involved in jeonse fraud, who purchased hundreds of houses without capital and embezzled nearly 10 billion KRW in deposits, has been arrested by the police.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 13th that they had apprehended 78 members of a real estate consulting company led by CEO A. They are suspected of purchasing 628 houses in Gangseo and Yangcheon districts of Seoul and Incheon from July 2017 to September 2020, embezzling 8 billion KRW in deposits from 37 tenants. A is presumed to be the mastermind behind Jeong, known as the recently deceased "Villa King."

According to the police, A conspired with sales agents and brokers to purchase multiple houses under the name of rental business operator B, who was arrested on December 28 last year, and agreed to share rebates after signing jeonse contracts.

Through analysis of bank account records, the police identified the accomplice relationship between B and A. Investigation of A’s seized mobile phone revealed that he used not only B but also multiple house purchase nominees including Jeong.

The gang targeted mid-priced multi-family houses with high rental demand that allowed "simultaneous progress." Simultaneous progress refers to a method where the deposit paid by the tenant is used as the purchase price by conducting the jeonse contract and the sales contract simultaneously. Once the seller receives the deposit, ownership of the house is immediately transferred to the buyer.

The suspects divided roles such as searching for properties, recruiting tenants, and drafting contracts to purchase multi-family houses without capital. During this process, they did not disclose to tenants that the purchase price and jeonse price were the same, meaning the houses were purchased solely with the jeonse deposit, nor that the rebate amount was included in the deposit.

Additionally, they received rebates ranging from several million to tens of millions of KRW from sellers under the name of sales and consulting fees. It is reported that illegal profits from rebate receipts alone amounted to approximately 800 million KRW.

The police stated, "Following A’s arrest, we will continue investigating the conspiracy relationships with the so-called 'Villa Kings'." They added, "To prevent such jeonse fraud, it is necessary to immediately notify tenants when the landlord changes and to include a special clause stating that the contract will be canceled if HUG guarantee insurance cannot be subscribed."

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