Police Arrest Gang Using 'Simultaneous Progress' Method in Jeonse Fraud... Embezzling 35.3 Billion KRW in Deposits

A group involved in a so-called 'simultaneous transaction' scheme, where real estate is bought with tenants' security deposits and ownership is transferred to a 'bare name' holder, has been arrested by the police for committing jeonse fraud. It was confirmed that the amount of jeonse deposits they embezzled reached 35.3 billion KRW.

On the 19th, the Cyber Investigation Division of the Seoul Metropolitan Police Agency announced that they had arrested seven members of the jeonse fraud group, including licensed real estate agent A, on charges of organized crime and fraud, as well as two brokerage assistants who aided their crimes. Among them, three were detained. Additionally, 20 brokerage assistants affiliated with the group have been booked for violating the Licensed Real Estate Agents Act and are under investigation.

According to the police, A opened licensed real estate offices in Bucheon, Gyeonggi Province, and Guro-gu, Seoul, in 2021 and is suspected of committing jeonse fraud using the simultaneous transaction method.

Police investigations revealed that A formed a criminal organization by recruiting sales agents, team leader-level brokerage assistants, and bare name holders to carry out the fraud. From July 2021, they disguised the bare name holders as rental business operators with no issues in returning jeonse deposits, and using the victims' jeonse deposits from lease contracts made in good faith, they purchased real estate. Ownership of the properties was transferred to the bare name holders.

They planned to bankrupt the bare name holders before the expiration of the jeonse contract period. Although they had no intention or ability to return the jeonse deposits from the start, they increased the jeonse deposits on the condition of subscribing to rental deposit insurance and obtained rental deposit insurance to shift the obligation of returning the deposits to the Housing and Urban Guarantee Corporation (HUG).

The police identified victims through a full investigation of real estate registered under the bare name holders. The properties confirmed as jeonse fraud cases totaled 153 households, with damages amounting to approximately 35.3 billion KRW. The police plan to apply for seizure and preservation of the embezzled funds in the future.

A police official stated, "When there is little difference between the jeonse deposit and the purchase price, there is a possibility of jeonse fraud using the simultaneous transaction method, so caution is needed," and added, "If a licensed real estate agent offers overly generous contract terms, it may also indicate potential jeonse fraud."

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