Eliminating No-Capital Gap Investment and Empty Lease Fraud... Busan Police Agency Arrests Jeonse Scam Crime Organization

Seven members of a criminal organization who embezzled approximately 15.4 billion KRW in jeonse deposits from 135 households across Busan were arrested by the police.

The Anti-Corruption and Economic Crime Investigation Unit of the Busan Metropolitan Police Agency announced on the 27th that they had apprehended seven individuals in their 30s, including Mr. A, on charges of criminal organization and fraud.

Mr. A, who lent his name as a nominal lessor for the organization, was detained, while the main perpetrator in his 40s, Mr. B, who led the actual crimes, is already in custody for another case.

According to the police, the organization used a “shell corporation” purchased and established under Mr. A’s name from November 2019 to August last year to obtain secured loans and acquire 174 unsold officetels, employing a “no-capital gap investment” scheme.

They recruited licensed real estate agents and brokerage assistants to mediate and manage the properties, signed contracts with tenants, and embezzled about 15.4 billion KRW in jeonse deposits. To reassure tenants suspicious of excessive bank mortgages, they claimed the properties were owned by a corporation and that the lessor owned multiple buildings.

Additionally, while purchasing unsold officetels, they inflated the sale prices by 20-30% or submitted false income verification documents to increase loan amounts, committing loan fraud worth approximately 20.9 billion KRW from six financial institutions.

Busan Police Agency.

Besides this case, the police also arrested eight people including a woman in her 50s, Ms. C, who embezzled about 16.6 billion KRW in jeonse deposits from over 210 tenants using the no-capital gap investment method; 14 individuals including construction business lessors who embezzled about 5.8 billion KRW in deposits from around 60 tenants through shell jeonse schemes; and a landlord couple who absconded without returning about 5 billion KRW in lease deposits from approximately 70 tenants.

A police official stated, “As the nationwide special crackdown period on jeonse fraud has been extended until December 31 this year, we will continue to thoroughly investigate all types of jeonse fraud,” adding, “We will do our best to support victims suffering from jeonse fraud.”

On the 1st of last month, the “Special Act on Support for Jeonse Fraud Victims and Housing Stability” came into effect, and applications from victims are being accepted. Once officially recognized as jeonse fraud victims, they can receive financial support such as postponement or suspension of auctions, priority purchase rights in auctions, loans, and emergency welfare assistance.

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