A Gang Indicted in Large Numbers for Inflating Jeonse Deposits to Fraudulently Obtain Security Money

'Extended Family' Jeonse Fraud Gang Also Involved

Tenants who deliberately inflated security deposits to sign jeonse contracts and committed insurance fraud against guarantee insurance companies, along with 'cousin brothers' involved in no-capital gap investment jeonse fraud, have been collectively referred to the prosecution.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 15th that they have sent three tenants, including A (38), and 51 real estate agents to the prosecution on charges of fraud and violation of the Licensed Real Estate Agents Act.

Tenant A and two others are suspected of fraudulently obtaining excessive insurance payouts from guarantee insurance companies starting from September this year, based on jeonse contracts signed in July-August 2021 with inflated security deposits. According to the police investigation, some real estate agents exploited the practice of returning part of the jeonse deposit to tenants under the name of 'interest support fees' while finding tenants, negotiating rebates with multiple real estate agents, and then signing the jeonse contracts.

[Provided by Seoul Metropolitan Police Agency]

Afterwards, they deposited the inflated jeonse deposit amount from the contract into the landlord's account, then on the same day received about 20 million KRW each as rebates through borrowed-name accounts. From around September this year, when the jeonse contracts ended, they also defrauded 828 million KRW by claiming guarantee fulfillment from the Housing and Urban Guarantee Corporation (HUG). During the investigation of accomplices of the so-called 'Villa King' Kim, who died in October last year, the police detected circumstances where some tenants demanded and actually received rebates from real estate agents, leading to an expanded investigation.

Additionally, the police referred cousin brothers and real estate agents to the prosecution on charges of jeonse fraud in the Gangseo-gu area of Seoul. B (26), who acquired a total of 32 houses through no-capital gap investment from July 2019 to January 2020, is suspected of deceiving tenants as if brokering legitimate houses together with C (32), a brokerage assistant at a cousin-related real estate office, and D (41), another brokerage assistant at the same office. The victims of their jeonse fraud number 32, with damages estimated at 8.1 billion KRW.

A police official stated, "While strictly responding to jeonse fraud cases, we plan to continue investigating the cases involving guarantee insurance companies, keeping open the possibility of similar cases."

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