Police on Tuesday opened an investigation into a home rental scam suspect and his family with simultaneous raids on their homes and offices in Suwon.
The suspect, known only by his surname Jeong, his wife and their son are accused of defrauding 394 tenants of 47.5 billion won ($35.1 million) after signing “jeonse” contracts.
Jeonse refers to a unique Korean system in which tenants give landlords a large returnable deposit instead of paying monthly rent. But the long-term deposit rental system has recently emerged as a big social issue, due to a large number of fraud cases, in which scammers usually buy multiple homes using the jeonse money as leverage and later refuse to return the deposits at the end of the lease.
Police estimate the total damage from the Jeong family’s suspected fraud may amount to 81 billion won, as the family is believed to have rented out 671 homes in 51 buildings. They believe Jeong and his wife have engaged in the fraudulent home rental business after establishing 18 real estate corporations, and their son is suspected of having brokered the jeonse contracts as a real estate agent.
About 20 police officers searched the Jeong family’s homes and offices to seize their mobile phones, computers and documents related to the jeonse contracts, according to officials at the Gyeonggi Nambu Provincial Police Agency.
The police agency plans to summon the Jeong family as criminal suspects as soon as the confiscated items are analyzed. Six other real estate agents and their assistants allegedly involved in Jeong’s home rental contracts are also under investigation, the agency said, noting it had received a total of 134 criminal complaints from Jeong’s tenants as of Monday. (Yonhap)