Tenant invests 1.6 billion KRW deposit in stocks and debt repayment... Daegu Police arrest one for 'Kkangtong Jeonse' scam

On the 18th, the Daegu Dongbu Police Station arrested suspect A on charges including fraud for swindling approximately 1.6 billion KRW in deposits from 17 tenants after leasing so-called ‘empty can jeonse’ properties.

A is suspected of operating by purchasing a multi-family house in Dong-gu, Daegu, through a ‘no-capital gap investment’ method, then using the deposits received from tenants for stock investments and personal debt repayments, effectively running a Ponzi scheme to cover the deposits.

Daegu Dongbu Police Station.

According to the police, A exploited the fact that tenants can only confirm the status of senior priority deposits in other units with the landlord’s consent, deceiving most victims by falsely disclosing senior priority deposit information.

The Economic Crimes Team 5 of the Investigation Division at Daegu Dongbu Police Station began investigating after receiving a complaint in March from a victim who had not been able to recover their jeonse deposit. After quickly securing additional victims and key evidence proving the criminal charges, the suspect was arrested. The investigation will continue to determine whether there are real estate agents or others involved in the crime.

Under the former Housing Lease Protection Act, even if tenants requested landlords to provide information on senior priority deposits, landlords could refuse without any enforcement mechanism, which raised ongoing issues. The revised Housing Lease Protection Act, enacted on April 18, addressed these problems by introducing a ‘landlord’s obligation to provide information’ clause.

The revision mandates that when signing a lease contract, landlords must present tenants with information on the senior priority confirmed date, deposit amount, and lease details of the property, as well as tax payment certificates under the National Tax Collection Act and Local Tax Collection Act.

Since July last year, the Daegu Police Agency has conducted a ‘special crackdown on jeonse fraud,’ resulting in 80 cases involving 145 individuals, with 66 sent to prosecution (including 2 arrests). The police announced that they will intensify the special crackdown until July 25, focusing investigative resources on malicious fraud crimes like jeonse scams that prey on ordinary citizens, and will thoroughly punish not only the actual perpetrators but also those behind the scenes.

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