'Incheon Geonchukwang' Jeonse Victim's Extreme Choice... "Auction Must Be Stopped"

The death cases of victims of the "Incheon Construction King" Jeonse fraud are occurring one after another. As calls for effective measures to support the victims of Jeonse fraud grow urgent, the victims are pleading for the suspension of auction procedures on the fraud-affected Jeonse properties as the top priority.

On the 17th, Ms. A, a woman in her 30s and a victim of Jeonse fraud in Michuhol-gu, Incheon, passed away. This is the third time a victim of Jeonse fraud in Incheon has taken their own life. Previously, on February 28 and March 14, two victims in their 20s and 30s also committed suicide.

The victim who died on the 14th was reported to have been suffering from severe financial hardship, to the extent that she called her mother a few days before her death asking, "Please send me just 20,000 won."

On the morning of the 17th, a memorial wreath was placed in front of the apartment entrance where victim A, who died from a jeonse fraud, lived in Michuhol-gu, Incheon. Photo by Yonhap News

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Ms. A had been complaining about not receiving her 90 million won deposit back. The apartment where Ms. A lived was entirely auctioned off last June due to Jeonse fraud, involving about 60 households. Ms. A was unable to receive even the priority repayment amount. When she moved in in 2019, she signed a Jeonse contract with a deposit of 72 million won, and in 2021, upon renewal, she increased the deposit to 90 million won at the landlord's request. For apartments completed in 2017, the Jeonse deposit must be 80 million won or less to guarantee a maximum priority repayment of 27 million won.

The victims unanimously agree that suspending the auction procedures on the fraud-affected Jeonse properties is the most urgent matter. Sang-mi An, chairperson of the Michuhol-gu Jeonse Fraud Victim Countermeasure Committee, reported on MBC Radio's "Kim Jong-bae's Focus" that cases of Jeonse fraud properties going to auction are rapidly increasing. Chairperson An said, "Other victims are continuously losing their bids. If this happens three times, the property is automatically sold," adding, "(Also) since auction hunters are involved, it proceeds smoothly. As soon as the property is sold, certified letters demanding eviction are sent out, and such stories keep coming in."

She continued, "First, we must stop people from being evicted. Once evicted, there is nothing to salvage except the priority repayment amount," and lamented, "With less than 30 million won, it is now hopeless to figure out where to live next week."

On the morning of the 17th, a banner appealing for measures against jeonse fraud victims was hung on the main entrance door of an apartment in Michuhol-gu, Incheon, where Mr. A, a deceased victim of jeonse fraud, had lived. Photo by Yonhap News

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Voices calling for the suspension of auctions on the affected properties are also emerging in the political sphere. On the 18th, Park Dae-chul, chairman of the People Power Party's Policy Committee, stated at a party strategy meeting, "The government has established and implemented 22 measures against Jeonse fraud in four rounds, but it is regrettable that these have not properly helped the public," and added, "Victims are demanding suspension of auctions and priority purchase rights, and some are even discussing a 'compensation first, recourse later' plan. We urge the immediate suspension of auctions."

Meanwhile, Mr. B (61), known as the Construction King, is currently on trial after being arrested and indicted on charges of colluding with sublease operators and real estate agents to rent out 161 multi-family housing units from January to July last year and embezzling 12.5 billion won in Jeonse deposits.

According to the prosecution, since 2009, Mr. B purchased land under other people's names such as real estate agents and brokerage assistants, and directly constructed small-scale housing like so-called "solo apartments" consisting of one or two buildings or low-rise villas through his comprehensive construction company. Construction costs were covered by project financing (PF) and completion loans. He also operated 5 to 7 real estate offices, delegating the brokerage of houses he owned to them.

Mr. B acquired about 2,700 housing units by rolling over completion loans, Jeonse deposits, loan interest, employee salaries, and deposits. However, as the interest grew beyond his ability to pay, the properties began to be auctioned off starting January 2022. It is understood that real estate agents concealed this situation and signed Jeonse contracts to fraudulently obtain Jeonse deposits.

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