40s Arrested for Embezzling 2 Billion Won Deposit... Ongoing Jeonse Fraud Cases

Police Arrest 2,905 Jeonse Fraud Suspects
2,285 Under Investigation...Methods Diversify
Experts "Tenants Need Active Investigation"

Jeonse fraud shows no signs of subsiding. The police are working tirelessly to catch increasingly diverse jeonse fraudsters.

Victims of jeonse fraud and empty jeonse are participating in a relay speech on the 25th at a sit-in in front of the National Assembly in Yeouido, Seoul, urging for proper resolution of jeonse fraud and empty jeonse issues. Photo by Kim Hyun-min kimhyun81@

According to Asia Economy's report on the 18th, the Yeongdeungpo Police Station in Seoul arrested a man in his 40s, Mr. A, on fraud charges on the 11th. Mr. A is accused of purchasing an officetel in Gangseo-gu through a no-capital gap investment in 2019, finding tenants, and embezzling a total deposit of 2 billion KRW from eight tenants. The police are conducting additional investigations into other offenses and the circumstances of the case.

However, despite active responses from investigative agencies, jeonse fraud remains prevalent. According to the National Police Agency’s National Investigation Headquarters’ “Interim Results of the Nationwide Special Crackdown on Jeonse Fraud,” from July last year to the end of May this year, the police arrested 2,905 jeonse fraud suspects and detained 288. There are 2,285 suspects currently under investigation.

The methods of jeonse fraud are also becoming more diverse. When categorizing the arrested individuals by detailed crime types, the most common case, accounting for 50.82%, involved fraudulent guarantees or insurance to embezzle jeonse loan funds. Next were cases of embezzling jeonse deposits or brokerage fees through no-capital gap investments at 17.75%, illegal brokerage activities at 16.79%, and non-return of deposits such as “empty jeonse” at 7.84%. Other types included false notification of rights relationships (3.56%), unauthorized contracts (2.87%), and contracts exceeding the scope of delegation (0.38%).

The Guro Police Station is also investigating Mr. B, a man in his 60s, who made fraudulent contracts earlier this year by using about 50 ordinary people without real estate agent licenses. Mr. B promoted properties online to attract tenants and used pop-up offices (mobile brokerage offices) or cafes to sign contracts. Approximately 1,700 tenants were victimized by Mr. B, who deceived them by making them believe in compensation guarantees related to contracts under nationally certified qualifications. The police have searched Mr. B’s residence and are conducting victim investigations.

Most victims of jeonse fraud are in their 20s and 30s, who lack surplus funds, making the financial and psychological damage more severe. Among the cases sent for prosecution, 54.4% of victims were in their 20s and 30s. The most common amount of damage was between 100 million and 200 million KRW at 33.7%, followed by 50 million to 100 million KRW at 33.3%.

Experts say that to prevent jeonse fraud, tenants need to actively investigate rather than simply trusting the words of brokers or landlords. Namgeun Kim, a lawyer at the law firm Wemin, said, “The key is to find a house where the jeonse price does not exceed 70% of the market price,” adding, “Tenants should accurately understand the difference between market price and jeonse price by using tools like the HUG app.” He also emphasized, “Even if you hear that guarantee insurance is available, you should directly verify it yourself.”

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