A so-called "family jeonse scam ring" that built about 10 multi-household dwellings and swindled about 19 billion won through so-called "deposit Ponzi" tactics was caught by police.
According to police and others on the 14th, the Gwanak Police Station in Seoul referred Lee and 16 relatives and associates to prosecutors in stages from February this year through last month on suspicion of fraud and other charges. Lee was sentenced last month in the first trial to 10 years in prison.
The ringleader of the jeonse scam and Lee's spouse, a person surnamed Hong with Chinese nationality, is staying overseas, so the investigation was suspended.
From 2018 to 2023, they allegedly built 11 multi-household dwellings in Gwanak District and elsewhere using tenants' deposits and loan funds, then ran a rental business and took about 19 billion won in deposits from 128 victims.
They was found to have engaged in a deposit Ponzi scheme in which they repaid one tenant's deposit with another tenant's deposit. It also emerged that even though the buildings were effectively in a "tin can dwellings" state—making it virtually impossible to return deposits due to diminished residual value—they deceived tenants by falsely stating the aggregates of senior deposits, which were the existing tenants' deposits.
Many of the victims were in their first years of the workforce. Police began accepting complaints and accusations from victims starting in 2024 and opened an investigation, detaining Lee early this year and continuing the probe.