The Ministry of Land, Infrastructure and Transport, the Supreme Public Prosecutors' Office, the Korean National Police Agency, and other pan-government agencies conducted a yearlong nationwide special crackdown on jeonse fraud and arrested nearly 3,000 jeonse fraud offenders.
The Ministry of Land, Infrastructure and Transport said on the 30th that from July last year to May this year, it completed the 5th and 6th planned investigations into jeonse fraud, examining a total of 2,072 suspicious transactions (749 in the 5th round, 1,323 in the 6th), and found indications of jeonse fraud in 179 cases. It referred 42 suspected landlords and related persons to the Korean National Police Agency for investigation.
In addition, there were 808 notifications to local governments for false reports of prices or contract dates, and 56 notifications to the National Tax Service due to improper gifting and excessive borrowing fund by related parties.
The Korean National Police Agency is operating dedicated investigation teams (intelligence teams) at police stations nationwide. From Aug. last year to Aug. this year, it additionally arrested a total of 2,913 jeonse fraud offenders.
Based on investigation requests from the Ministry of Land, Infrastructure and Transport and others, the Korean National Police Agency applied the Criminal Act's "crime organization" charge to six large-scale jeonse fraud rings involving deposit embezzlement through "zero-capital gap investing" and jeonse loan fraud (282 arrested, 13 detained). In particular, to help recover losses for jeonse fraud victims, a total of 53.8 billion won was preserved for confiscation and collection before indictment.
The Supreme Public Prosecutors' Office, centered on 96 prosecutors dedicated to jeonse fraud designated at 60 prosecutors' offices nationwide, is responding strictly to jeonse fraud crimes from the early stages of cases in close cooperation with related agencies such as the Ministry of Land, Infrastructure and Transport and the Korean National Police Agency.
Dedicated personnel, including prosecutors in charge of jeonse fraud at prosecutors' offices nationwide, are working to improve the effectiveness of crackdowns and investigations by thoroughly supplementing investigations to identify accomplices and additional offenses, as well as the full scope of criminal proceeds.
In particular, for organized jeonse fraud offenders, the "crime organization" charge is being applied. Authorities are also responding with meticulous legal review and active maintenance of prosecution to various methods, including loan fraud crimes that serve as the "funding source" of jeonse fraud, unauthorized leasing of trust-held real estate, and succession and renewal of lease contracts.
In parallel with the jeonse fraud crackdown, the Ministry of Land, Infrastructure and Transport also conducted a planned investigation into real estate syndicate scams that cause harm to ordinary people by misrepresenting mountainous land and farmland that are difficult to develop as land with high development potential. After investigating a total of 1,487 suspicious transactions, indications of real estate syndicate scams were found in 12 cases, which were referred to the police for investigation.
Starting in the first quarter of this year, the Ministry of Land, Infrastructure and Transport has been operating a nationwide regular investigation system using an artificial intelligence (AI)-based extraction system for jeonse fraud and real estate syndicates. It plans to further improve the accuracy and effectiveness of planned investigations through system advancement and continuous addition of training data.
Kim Gyu-cheol, head of the Dwellings and land bureau at the Ministry of Land, Infrastructure and Transport, said, "Eradicating jeonse fraud is not a one-off crackdown but a task that requires continuous and systematic response," adding, "We will do our best to create a real estate market environment where the public can conduct real estate transactions safely by incorporating AI technology and strengthening interagency cooperation systems."