"I'll Sell It with a Jeonse Lease"... 36 Billion Won 'Empty Jeonse' Scam

[Asia Economy Yeongnam Reporting Headquarters Reporter Hwang Du-yeol] A jeonse fraud organization that deceived tenants by transferring the leasehold to "bare" buyers and embezzling the lease deposit has been caught.

The Busan Metropolitan Police Agency's Violent Crime Investigation Unit announced on the 31st that they arrested 113 members of a group who embezzled about 36.1 billion KRW in lease deposits from tenants of 152 villas in the metropolitan area, and among them, 5 were detained.

The fraud organization consisted of bare buyer recruitment and distribution members, consulting agents, licensed real estate agents, brokerage assistants, and judicial scriveners, and even the bare name holders who lent their names were all arrested.

They used a new type of "empty jeonse" scheme by setting the lease deposit as high as possible at about 150% of the publicly announced price, which is the guarantee limit of the Housing and Urban Guarantee Corporation (HUG), and simultaneously conducting jeonse and sale transactions at the same amount, secretly transferring the leasehold to bare buyers behind the tenants' backs, earning rebates worth tens of millions of KRW.

Documents of the 'Kkangtong Jeonse' seized by the police. [Image source=Busan Police Agency]

Organization member A approached owners of villas in the metropolitan area that were listed for sale at 350 million KRW in April 2021 but were not selling, telling them that the price must be raised and sold with jeonse, and demanded the difference as a rebate in advance upon receiving the deposit.

After raising the jeonse deposit to 437 million KRW, he advertised that he would pay a 10 million KRW commission if a tenant was found, and received tenant introductions from real estate contacts to proceed with the jeonse contracts.

On the day of the deposit balance payment, he found a buyer from the bare buyer distribution organization, transferred the villa ownership, received an 87 million KRW rebate, and then disappeared.

Most of the victims were newlyweds and young professionals with no experience in jeonse or sales, and the amount of damage is also known to be considerable.

A police official said, "If it is insured by the Housing and Urban Guarantee Corporation (HUG), there is no problem even if the deposit is large, and if special benefits such as 'moving expense support' or 'brokerage fee exemption' are offered, you must suspect fraud," adding, "We will do our best to eradicate lease deposit fraud crimes such as the 'empty jeonse' scheme and conduct swift crackdowns through close investigative cooperation with related ministries."

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