Jeonse Loan Fraud Group Indicted for 7.3 Billion Won...First Domestic Application of 'Criminal Organization Crime'

A fraud organization that embezzled more than 7.3 billion won by taking out loans from banks under the pretext of jeonse deposits has been prosecuted for the first time under the 'criminal organization offense.'

The Criminal Division 1 of Bucheon Branch, Incheon District Prosecutors' Office (Chief Prosecutor Baek Seung-ju) announced on the 19th that it has arrested and indicted eight members of a jeonse loan fraud organization, including the ringleader A (51), on charges of fraud and organizing and operating a criminal organization.

A and others are accused of recruiting fake landlords and tenants, creating false lease contracts, and obtaining jeonse loans 79 times from six banks between January 2021 and July last year, embezzling a total of 7.33 billion won.

The prosecution viewed that A and his accomplices divided roles among recruiters of landlords and tenants and licensed real estate agents, committing the crimes in an organized manner, and applied the criminal organization offense for the first time in the country to a jeonse loan fraud organization.

A, who has a prior conviction with a five-year prison sentence for loan fraud, recruited accomplices, assigned ranks such as manager and team leader, and operated an incentive system.

Moreover, the prosecution explained that the group exhibited typical characteristics of a criminal organization by holding dinners and workshops, appointing lawyers for accomplices if the crime was exposed, and sharing countermeasures.

Structure of Jeonse Loan Fraud Crime [Provided by Incheon District Prosecutors' Office Bucheon Branch]

With the application of the criminal organization offense to this fraud group, a legal basis was also established to confiscate criminal proceeds.

A prosecution official stated, "When prosecuting jeonse loan fraud only under fraud charges, criminal proceeds are considered 'property damaged by crime,' making confiscation and recovery difficult. By applying the charges of organizing, joining, and operating a criminal organization, it is now possible to confiscate and recover criminal proceeds."

He added, "We will respond strictly to jeonse fraud crimes that threaten housing stability by depriving ordinary citizens of loan opportunities, in close cooperation with the police."

Meanwhile, since October last year, the Bucheon Branch has formed a dedicated jeonse fraud task force and indicted 34 jeonse fraud offenders (20 detained), including A and his group.

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