49 Arrested in Rental Deposit Scam Targeting Young Adults

A fraud ring of 49 individuals, responsible for defrauding young people with 'kkangtong jeonse' (empty jeonse) schemes where tenants are unable to recover their deposits, has been apprehended by police and transferred to the prosecution. The Seoul Metropolitan Police Agency confirmed that 49 suspects, including property developers and brokers, systematically engaged in rental deposit fraud involving newly built officetels and have been sent to the prosecution.

The group committed their crimes between December 2021 and July 2022 in the Seoul metropolitan area, colluding with developers, sales brokers, and investors who used minimal capital for 'gap' investments. They employed the 'kkangtong jeonse' method, where rental deposits were set higher than the actual sale price of the properties. The fraud ring also utilized the 'simultaneous transaction' technique, using 'straw landlords,' such as individuals with poor credit unable to return deposits, to borrow their names.

The victims, totaling 22 individuals, were mostly university students and early-career professionals with limited experience in real estate transactions. The total amount of deposits defrauded from them reached 5.2 billion won.

Some licensed real estate agents and their assistants also participated in the criminal enterprise. They received exorbitant fees, 10 to 15 times the legal rate, for their assistance in recruiting tenants. The kickbacks received by the fraud ring ranged from a minimum of 10 million won to a maximum of 60 million won per contract.

One of the arrested suspects forged rental agreements into monthly rent contracts to swindle 130 million won from a loan company. In the process, the tenants were exposed to secondary threats, such as loan sharks directly visiting their addresses.

Police are providing guidance on how to verify 'kkangtong jeonse' risks before signing rental contracts and informing tenants of their rights to terminate leases upon landlord changes. The police plan to continue expanding investigations into rental deposit fraud and crimes that harm the livelihoods of citizens, particularly those targeting vulnerable individuals.