LH, Corruption in Rental Housing Purchase Project... Illicit Brokerage and Kickbacks for Acquiring 1,800 Units

Former LH Employee Arrested and Indicted for Accepting Bribes and Providing Internal Information
Four Brokers Also Indicted for Pocketing 8.4 Billion KRW in Solicitation and Referral Fees

Regarding the LH (Korea Land and Housing Corporation)'s rental housing purchase project for the housing-vulnerable groups, an LH employee who received bribes and provided internal information from a broker, along with a group who received tens of billions of won from building owners as solicitation and brokerage fees for purchasing unsold houses, have been brought to trial.

On the 9th, the Criminal Division 6 of Incheon District Prosecutors' Office (Chief Prosecutor Son Sang-wook) announced that A (45), who was in charge of the purchase rental housing work at the LH Incheon Headquarters, was arrested and indicted on charges including bribery under the Act on the Aggravated Punishment of Specific Crimes and breach of trust in the course of duty.

The prosecution also arrested and indicted B (32), the broker representative, on charges including violation of the Attorney-at-Law Act and bribery, and non-arrest indictment was made against three accomplices including C (29).

A is accused of receiving money and entertainment worth approximately 86.73 million won from B in 35 installments from November 2019 to May 2021 in exchange for providing internal materials.

A, who was in charge of the purchase rental housing work, received bribes from B and provided the LH Incheon Headquarters' appraisal evaluation summary data 16 times. This data was classified as security level 1 information containing rental housing status and appraisal evaluation results.

A was able to exercise significant influence over housing purchase decisions by overseeing on-site inspections, document reviews, and appraisal evaluations related to purchase rental housing, but it was revealed that the internal system to monitor this was inadequate.

Overview of the Crime Between All LH Employees and Broker Gang [Provided by Incheon District Prosecutors' Office]

Purchase rental housing is a project where the government buys villas or officetels and rents them out to homeless low-income citizens at prices lower than market value.

B and his group were investigated to have received or promised solicitation and brokerage fees worth approximately 9.94 billion won in 29 installments as a reward for introducing A to building owners who wanted to quickly dispose of unsold houses.

The houses purchased by the LH Incheon Headquarters at a cost of 330.3 billion won through their brokerage totaled about 1,800 units, including 165 unsold houses owned by the group led by the so-called "Construction King" involved in the Jeonse fraud in Michuhol-gu.

A also caused damage to LH by paying brokerage fees worth approximately 119 million won to a real estate brokerage corporation operated by B through a loophole by borrowing a real estate agent license. The prosecution seized and preserved assets through a seizure preservation request to recover the criminal proceeds obtained by B.

A prosecution official stated, "LH's rental housing purchase project is a public housing stability project aimed at purchasing quality housing through fair competition and providing it to housing-vulnerable groups at affordable rents," adding, "If corruption such as lobbying involving the purchase project personnel occurs, it inevitably leads to direct and indirect damage to the welfare of low-income housing, such as deterioration of rental housing quality and increased rental burdens."

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