Organized Crime Group Obtains Rebates... 31 Members of Jeonse Fraud Gang Arrested

339 Victims and 68 Billion KRW in Damages
414 Billion KRW in Real Estate Seized and Forfeiture Preservation Requested

A group involved in organizing a criminal syndicate and generating profits by receiving rebates from real estate lease contracts has been arrested by the police. It was confirmed that there are 339 victims who were defrauded of their jeonse deposits, with damages amounting to 68 billion KRW.

The Financial Crime Investigation Unit of the Metropolitan Investigation Division at the Seoul Metropolitan Police Agency announced on the 21st that they have arrested three people, including Kim (43), the CEO of a housing rental company, and two general managers on charges of organizing a criminal syndicate and fraud. Additionally, 28 members of the organization, including real estate agents who conspired with them, were booked without detention. They are scheduled to be transferred to the prosecution on the same day.

According to the police, Kim is suspected of organizing a criminal syndicate to carry out jeonse fraud in the Seoul, Gyeonggi, and Incheon areas from March 2016 to December 2021, through which he illegally received rebates amounting to 1.8 billion KRW.

Police investigations revealed that Kim, without separate capital, systematically purchased large quantities of houses and set jeonse prices higher than the sale prices, conspiring to share the rebates generated from the profit margin and forming a criminal organization. The organization was subdivided into an 'Sales Team' that signed sales contracts with building owners and sales agents, a 'Brokerage Team' that promoted the properties on real estate platforms under the name of real estate agencies and handled lease contract procedures after the sales contracts were signed, and a 'Promotion Team' that created and distributed advertising flyers to promote Kim’s jeonse properties.

Kim targeted mid-to-low priced housing with high rental demand, specifically properties suitable for the 'simultaneous progression' method, to commit the crime. By receiving jeonse deposits higher than the sale prices and purchasing multi-family houses, the difference between the sale price and the jeonse deposit was returned to the previous owners as rebates, without notifying the tenants of this fact. Subsequently, Kim and his group pocketed several million KRW per case under the name of rebates.

During this process, the return of jeonse deposits to tenants whose lease contracts had expired was not fulfilled. The police confirmed that the number of victims of the jeonse fraud reached 339, with damages totaling 68 billion KRW. It was also confirmed that Kim had no economic ability to return the deposits from the outset of the crime, having received personal rehabilitation approval in April 2015. The police applied for pre-indictment seizure of 203 real estate properties worth approximately 39.6 billion KRW acquired by the group. Additionally, they applied for seizure of assets worth about 1.8 billion KRW, including real estate, bank deposits, and vehicles owned by Kim.

A police official stated, "Before signing a lease contract, it is necessary to check the surrounding sale and jeonse prices using the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system, and verify the list of malicious landlords and tax delinquency status through the Housing and Urban Guarantee Corporation (HUG) Safe Jeonse application."

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