[Exclusive] Police Investigate 30s Villa King in 14 Billion Won Jeonse Fraud... Actively Considering Charges of Organized Crime

Man in 30s Arrested for 14 Billion Won Jeonse Fraud in Seoul, Gyeonggi, and Incheon
Organized Jeonse Fraud Charged with Crime Syndicate Organization
Woo Jongsu, Head of National Police Agency, "We Will Correct Illegal Jeonse Transaction Practices"

The police are investigating another group involved in a jeonse fraud scheme worth around 14 billion KRW, operating across Seoul, Gyeonggi, and Incheon regions. Authorities are conducting additional investigations into the main suspect as well as related parties, including licensed real estate agents. Viewing the continuous chain of jeonse fraud crimes, the police have decided to take strong measures, including applying charges of organizing a criminal group.

◆ Jeonse Fraud Worth '14 Billion KRW' Across Seoul, Gyeonggi, and Incheon = According to a comprehensive report by Asia Economy on the 20th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency arrested a man in his 30s named Choi on the 29th of last month on charges of fraud and is currently investigating him. Choi is accused of embezzling approximately 14 billion KRW in deposits from 67 tenants between 2019 and 2022 in areas including Gangdong, Yangcheon, Guro, Yeongdeungpo, Gangbuk, Gangseo, and Geumcheon districts in Seoul; Bucheon, Gimpo, and Goyang in Gyeonggi Province; and Incheon. It is known that Choi mainly targeted multi-family housing in his fraudulent activities.

A police official stated, "He used a gap investment method to embezzle jeonse deposits across the Seoul metropolitan area, including Seoul and Gyeonggi," adding, "We are continuing additional investigations into Choi and other related individuals."

Jeonse fraud damages are primarily occurring in multi-family housing and officetels. Properties with lower deposits and relatively lower market prices, as well as ordinary citizens who are actual users, are the main targets of these crimes. According to the results of crackdowns conducted by the National Police Agency from July last year to March this year, the types of housing affected by jeonse fraud were mostly multi-family houses with 1,129 units (66.2%), followed by apartments with 271 units (15.9%), officetels with 265 units (15.5%), and detached houses with 40 units (2.4%).

◆ Police to Apply Charges of Organizing a Criminal Group for Organized Jeonse Fraud = The police plan to actively consider applying charges of organizing a criminal group for organized jeonse fraud and will promptly launch investigations into suspected individuals.

Woo Jong-su, head of the National Investigation Headquarters, held a nationwide investigation command meeting this morning and said, "We will boldly initiate investigations nationwide against suspected individuals," adding, "We will actively apply charges of organizing a criminal group for organized jeonse fraud and strongly crack down on illegal brokerage and appraisal activities to correct unlawful jeonse transaction practices."

Article 114 of the Criminal Act, which covers the crime of organizing a criminal group, carries penalties of death, life imprisonment, or imprisonment for at least four years, which are much heavier than the penalties for fraud under the Criminal Act (up to 10 years imprisonment or a fine of up to 20 million KRW) or fraud under the Act on the Aggravated Punishment of Specific Economic Crimes (up to life imprisonment or imprisonment for at least five years).

A police official said, "We plan to actively investigate so that criminals receive these enhanced punishments by applying charges of organizing a criminal group." Even those who participated as members rather than the main perpetrators can face severe penalties. There have been criticisms that the sentences for fraud have been too light compared to the suffering experienced by victims.

Additionally, the police plan to strengthen crackdowns on illegal brokerage and appraisal activities and deploy crime proceeds tracking teams nationwide. According to the jeonse fraud arrests over the past eight months, landlords and tenants accounted for 1,000 individuals (45.7%), while licensed real estate agents and assistants accounted for 414 individuals (18.9%), making up more than half of all suspects.

However, experts predict that applying charges of organizing a criminal group and recovering criminal proceeds in jeonse fraud cases will not be easy.

Seo Ji-won, a lawyer at the law firm Naran, said, "If no single person oversaw the entire crime and each played their basic role, it may be difficult to apply charges of organizing a criminal group," adding, "However, strengthening crackdowns and increasing punishment levels may raise criminals' awareness and have a preventive effect."

Lee Yun-ho, distinguished professor of police studies at Korea Cyber University, stated, "Jeonse fraud arises from the unique jeonse system in Korea combined with the relatively light penalties for property crimes," and suggested, "Currently, the investigative organization must prove that the proceeds are criminal, which has limitations, so it may be worth considering shifting the burden to suspects to prove that the proceeds are not criminal."

Meanwhile, the police conducted a special crackdown on jeonse fraud from July last year to March this year, arresting 2,188 suspects, detaining 209, and currently investigating 1,749 individuals.

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