Six Arrested and 38 Booked for Obtaining 2.1 Billion Won Jeonse Loan Using Fake Documents

Daegu Police: "Exploiting Loopholes in Bank Non-Face-to-Face Loans"

The Daegu Metropolitan Police Agency arrested a group who obtained a loan of 2.1 billion KRW using fake jeonse contracts and detained six individuals.

According to the police on the 25th, a jeonse loan fraud group exploited the youth rental support system of financial institutions by recruiting fake landlords and tenants, then obtained loans totaling 2.1 billion KRW in 21 installments from financial institutions using false jeonse contracts. The police arrested six people, including landlord recruiter A (26), on charges of fraud and violation of the Act on the Aggravated Punishment of Specific Economic Crimes, and booked 38 others without detention.

Daegu Metropolitan Police Agency

Landlord recruiter A is suspected of conspiring with tenant recruiters B, C, and D to recruit suspects playing the roles of fake landlords and tenants for one year starting from September 2021, submitting fake contracts and supporting documents, and deceiving financial institutions to obtain 2.1 billion KRW.

The police believe they fabricated fake documents to obtain jeonse loans by exploiting a loophole in the system where the Korea Housing Finance Corporation provides full guarantees and commercial banks offer low-interest loans to low-income, homeless youth.

A police official stated, “The group exploited a systemic loophole where banks conduct loan screenings formally if they have guarantee documents from the Housing Finance Corporation, such as non-face-to-face loan applications, and obtained loans through false jeonse contracts.”

The police have prepared grounds to confiscate part of the criminal proceeds through pre-indictment seizure and other methods, and argued that measures to make loan screening more substantive are necessary to prevent formalistic loan examinations.

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