[Exclusive] Secret Proposal from Construction King Gang: "Let's Rent Out the Auctioned Apartment"

Mitchuhol-gu D Apartment Deposit Damage Amounts to 35 Billion Won
All 45 Households Forced into Voluntary Auction
Proposal to Former Tenants: "Let's Share Short-Term Rental Profits"
Haengmansa Side Explains, "Mr. Han Is a Stranger"

A group known as the so-called ‘Construction King,’ who was arrested on charges of a 12 billion KRW jeonse fraud in the Michuhol-gu area of Incheon, has been caught attempting to re-lease victim apartments that have been put up for auction. It appears they tried to compensate for the damages by registering leasehold rights without tenant protection, and after the tenants moved out during the auction process, renting out the vacant units on a short-term monthly basis. Rather than establishing fundamental relief measures for the affected tenants, they attempted to enter into lease contracts that could potentially create new victims.

According to the Jeonse Fraud Victim Countermeasure Committee (Countermeasure Committee) in Michuhol-gu, Incheon, on the 19th, a person named Han, who claimed to be affiliated with ‘People Making Happy Spaces (Haengmansa),’ a group linked to the Construction King, called tenant A of one of the victim apartments, D Apartment, on the 11th and made a proposal. The proposal was to rent out A’s vacant apartment on a short-term lease. D Apartment in Dohwa-dong, Michuhol-gu, Incheon, consists of 45 households, all of which have been subjected to voluntary auctions (mortgage enforcement auctions). The total deposit damage amounts to about 3.5 billion KRW. Among these, four units have been sold after the third auction, and if the occupants do not vacate voluntarily, they face forced eviction.

Victim A, who is about to lose the entire 90 million KRW jeonse deposit, registered a leasehold right on the apartment amid the auction process due to anxiety about possible eviction and moved elsewhere last month. Han’s proposal to A was to share profits through short-term leasing. For example, if a lease contract is signed for 1 million KRW, 50% of the monthly rent income would be used to pay interest to the bank holding the mortgage, 30% would go to the tenant, and 20% would be shared by the company.

Han claimed this was a relief measure for the affected residents. However, questions arise as to whether the auction status and other details would be accurately disclosed when listing the apartment as a short-term rental. If the lease contract is concluded despite such disclosure, the tenant must vacate the property whenever a forced eviction order is issued due to the auction winning bid. This means entering into an unstable lease contract. Moreover, tenants who suffered from jeonse fraud become the parties to such lease contracts, bearing the risks of the contract. In other words, victims of jeonse fraud could inadvertently become involved in contracts that may create new victims.

A reported this to the Countermeasure Committee, and when the committee raised concerns about the unreasonable proposal with Haengmansa, a Haengmansa representative reportedly explained that “Han is not an agent of Haengmansa.” Haengmansa is an organization entrusted with handling the entire asset disposal and crisis management following the Construction King’s arrest. However, if Han is not affiliated with Haengmansa and has no connection to D Apartment, it is difficult to explain how he knew the apartment was vacant and why he proposed a lease contract for a property he had no authority over.

A Countermeasure Committee official said, “Han is presumed to be an acquaintance of Kim, the lessor of D Apartment. Considering that Kim is one of the front men for the Construction King (Nam), it can only be suspected that this proposal ultimately came from the Construction King’s side.” The official also criticized, “Instead of making legitimate efforts to recover damages from the fraud, they are trying to compensate for financial losses by using methods that could cause further jeonse fraud victims.”

[Image source=Yonhap News]

However, Han, who was difficult to reach, told a reporter during a phone call that contrary to his initial claim of being affiliated with Haengmansa, “I do not know the Construction King or the Haengmansa representatives at all.” He explained, “After hearing about the jeonse fraud case in Michuhol-gu and feeling sorry, I approached Haengmansa with this idea, and they gave me A’s contact information. Although I am misunderstood as a new fraudster, I proposed this purely to help resolve the situation.”

Recently, three young victims of the Construction King jeonse fraud case died consecutively. The number of victims is known to be around 700, with damages amounting to about 50 billion KRW. The 50 billion KRW damage includes the previously indicted 12.5 billion KRW plus additional amounts under police investigation. The police are investigating 51 additional accomplices related to this jeonse fraud case and plan to send them to the prosecution soon. Currently, the Construction King and nine accomplices, including licensed real estate agents, are on trial for fraud and violations of the Real Estate Agent Act.

Meanwhile, a report was received that a landlord owning hundreds of officetels in the Dongtan New Town area went bankrupt, leaving dozens of victims unable to recover their jeonse deposits, prompting a police investigation.

On the 18th, the Hwaseong Dongtan Police Station in Gyeonggi Province launched an investigation after receiving a report that a landlord owning about 250 officetels failed to return deposits, raising concerns about a potential mass jeonse fraud incident.

A police official said, “We started an investigation after receiving a report from a victim and are currently verifying additional victims and the exact amount of damages.” The reporter is known to have claimed that despite the expiration of the officetel lease contract, they have not received their deposit back.

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