"Real Estate Investment Fraud Group Indicted for Generating 40% High Returns Through Auction Investment"

A real estate investment fraud group that deceived victims by promising over 40% high returns through real estate auction investments and embezzled more than 14.5 billion KRW has been brought to trial.

On the 25th, the Criminal Division 5 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Heo Ji-hoon) announced that they had arrested and indicted Mr. B (50), the CEO of real estate investment company A, on the 22nd on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. Former and current executives of the company, including lawyers, were also indicted without detention on the same day.

[Image source=Yonhap News]

According to the prosecution, Mr. B and others are accused of deceiving 120 victims from April 2019 to last April by claiming that they would acquire real estate with lien disputes cheaply through auctions and resolve the disputes to generate over 40% high returns, thereby embezzling a total of 14.557 billion KRW.

They are understood to have misled victims into believing that company A had a special method to resolve lien disputes. In reality, they have failed to resolve the liens, and about 20 civil lawsuits are currently ongoing. Although they intended to use the investment funds to repay earlier investors or for expenses such as leasing luxury foreign cars of the CEO and payments for prostitution, they deceived victims by claiming that the funds were deposited in an escrow account under the name of a real estate specialist lawyer affiliated with company A and would be fully used as real estate purchase funds.

By putting forward a trusted lawyer whom the general public relies on, they instilled trust that "losses would be compensated even if they occurred," which further expanded the damage. The prosecution has requested the Korean Bar Association to initiate disciplinary action against Mr. C, a former in-house director and lawyer of company A.

Separately, Mr. B is also accused of fraudulently borrowing a total of 600 million KRW from four victims between November 2020 and July 2021 by deceiving them into believing that the business was doing well. Among the victims, three suffered overlapping damages.

A prosecution official stated, "We will continue to respond swiftly and strictly to crimes that seriously harm the livelihood of ordinary citizens."

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