Jeonse Fraud Causes 500 Billion Won and 4,000 Victims This Year Alone... "Even If Criminals Are Caught, Victims Face Homelessness"

Confiscated and Recovered Amounts Only 23% of Damages
"Urgent Establishment of Measures to Remedy Fraud Victims"

This year, the number of victims of Jeonse fraud has exceeded 4,000, with the total damage amounting to more than 500 billion won.

According to data submitted by the National Police Agency to Jeon Bong-min, a member of the People Power Party on the National Assembly's Public Administration and Security Committee, the total number of victims of Jeonse fraud cases this year was 4,481, with damages totaling 510.5 billion won.

Real estate fraud and virtual asset crimes targeting ordinary citizens continue, but it has been found that the victims often fail to recover their lost assets properly even when the perpetrators are caught. Ordinary citizens who have fallen victim to jeonse fraud, losing their deposits and ending up homeless, are a typical example.
[Photo by Asia Economy]

Although real estate fraud and virtual asset crimes targeting ordinary citizens continue, it has been found that the victims often fail to properly recover their lost assets even when the perpetrators are caught. Ordinary citizens who lost their deposits due to Jeonse fraud and ended up homeless are a representative example.

Jeonse fraud cases, known as the so-called 'Villa King' incidents, have occurred nationwide involving hundreds of billions of won, but among these, the police arrested 2,582 people for Jeonse fraud, and the amount confiscated or recovered before prosecution was only 115.3 billion won, which is just 22.6% of the total damage.

In 2021, the police identified 426 victims of Jeonse fraud domestically, and most of them?416 people?did not receive all or part of their deposits back.

Loopholes in the Corrupt Property Confiscation Act... "Legislative Supplementation Needed"

Victims of jeonse fraud and empty jeonse staged a relay speech on May 25 in front of the National Assembly in Yeouido, Seoul, urging for proper resolution of jeonse fraud and empty jeonse issues.
[Photo by Hyunmin Kim kimhyun81@]

Jeonse fraud is classified as fraud, making confiscation and recovery impossible. The cases where confiscation and recovery were achieved were those where the police applied under charges such as 'forgery of private documents' and managed to restore the crime damage with difficulty. Even when investigative agencies intervene, it is not easy to restore damages to ordinary citizens.

In February, the Anti-Corruption Investigation Unit of the Southern Gyeonggi Provincial Police Agency launched an investigation into a scam involving landlords and real estate agents colluding in a "kan-tong" (empty shell) housing Jeonse and monthly rent fraud case. However, of the 1.75 billion won in damages, only 40 million won was recovered. This was the result obtained after two applications due to the prosecutor's refusal to request confiscation.

The legal community's judgment on Jeonse fraud is also regrettable. In 2020, the Incheon District Court dismissed the compensation claim of the claimant in a first-instance Jeonse fraud trial.

In the second trial, the prosecutor argued that the crimes of forgery of private documents, use of forged private documents, and fraud are separate crimes in substantial concurrence, and since profits were generated through forgery of private documents and use thereof, such profits constitute criminal proceeds and must be confiscated due to their organized nature.

However, the court ruled that since the documents were forged as a means of committing fraud, it is reasonable to regard the property obtained as proceeds from the fraud crime, and the Supreme Court upheld the same decision.

Experts point out, "Financial crimes targeting ordinary citizens are difficult to confiscate and recover before prosecution, so damage recovery is poor and slow," adding, "This problem arises because fraud is not included in the current Corrupt Property Confiscation Act."

The Corrupt Property Confiscation Act defines criminally obtained property as property acquired from victims through embezzlement, breach of trust, or specific fraud crimes (organized crime group fraud, quasi-deposit investment fraud, multi-level marketing fraud, telecommunication financial fraud). On the other hand, Jeonse fraud falls under 'general fraud,' making confiscation and recovery difficult.

Jeon Bong-min pointed out that under the 'Special Act on the Confiscation and Recovery of Corrupt Property' (Corrupt Property Confiscation Act), victims of corrupt crimes can recover their lost property, but Jeonse fraud is excluded from the pre-prosecution confiscation and recovery targets under the Act, resulting in inadequate compensation for victims.

He added, "In April, I proposed a bill to include Jeonse fraud in the Corrupt Property Confiscation Act, and I will strive to ensure it is passed during the regular session of the National Assembly," emphasizing, "The government must promptly prepare relief measures for the unrecovered damages from Jeonse fraud."

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