Jeonse Fraud 'Geonchukwang' Gang Faces First Charges Under Organized Crime Act... Systematic Crimes Involving Landlords and Brokerage Assistants

For the first time in a Jeonse fraud case, the so-called 'Construction King' gang was charged with organizing a criminal group.

The Anti-Corruption Economic Crime Investigation Division 1 of the Incheon Metropolitan Police Agency announced on the 10th that they plan to send 51 members of a construction business group led by A (61) to the prosecution on charges including fraud.

A and others are accused of embezzling 43 billion KRW in Jeonse deposits from tenants for 533 apartment and villa units in the Michuhol-gu area of Incheon from March 2021 to July last year.

Among the 51 suspects, the police additionally applied charges of organizing a criminal group to 18 individuals, including A, who were actively involved in the crime. Nine of these were among the first 10 indicted.

These include nominal landlords, brokerage assistants, and fund managers. This is the first time that charges of organizing a criminal group have been applied to a gang involved in a Jeonse fraud case.

The statutory penalty for fraud is imprisonment for up to 10 years, but if two or more frauds are committed, the 'concurrent offense aggravation' rule allows the sentence to be increased by up to half of the maximum statutory penalty. Since A is accused of 533 fraud cases, which is more than two, adding half of the maximum penalty for fraud, 5 years, results in a maximum sentence of 15 years in prison.

If the charge of organizing a criminal group is recognized as guilty by the court, not only A, who led the crime, but also the other 17 accomplices charged with this offense will be punished with the same sentence regardless of their position within the organization. However, the addition of the charge of organizing a criminal group does not increase the statutory maximum sentence.

An information notice indicating that the apartment is under investigation for a jeonse fraud case is posted on the front door of an apartment in Michuhol-gu, Incheon. [Image source=Yonhap News]

The police believe that A colluded with licensed real estate agents and others to systematically commit Jeonse fraud. Despite the worsening financial situation, such as overdue loan interest payments and the possibility of houses being auctioned, they recklessly entered into Jeonse contracts.

Investigations revealed that since 2009, A purchased land under the names of licensed real estate agents and brokerage assistants, then built small-scale apartments and villas through a comprehensive construction company he operated.

He increased his real estate holdings by constructing multi-family housing using Jeonse deposits and mortgage loans, and is known to currently own 2,700 units in Incheon and the Gyeonggi-do area.

For his rental business, A operated 5 to 7 real estate offices under the names of licensed real estate agents, assigning them exclusively to handle brokerage of houses he owned.

He also organized the offices into brokerage teams, housing management teams, and planning and administrative teams, paying salaries and performance bonuses based on contract conclusions to licensed real estate agents belonging to the brokerage teams.

During this process, the licensed real estate agents concealed the fact that A was the actual owner of the houses, and from January last year, even though auctions began on several houses, they signed Jeonse contracts without informing the tenants.

A police official stated, "We are continuing to investigate related complaints, and when the case is finally sent to prosecution, we plan to apply for pre-indictment seizure to freeze the criminal proceeds of A and his group. We will actively apply charges of organizing a criminal group for crimes infringing on ordinary citizens, such as Jeonse fraud, in the future."

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