Purchased 283 houses through gap investment without capital
2 licensed brokers indicted without detention
A man in his 50s who stole billions of won in deposits for charter rentals through ‘non-capital gap investment’ in Hwagok-dong, Gangseo-gu, Seoul was handed over to trial on charges of fraud.
On the 4th, the Seoul Southern District Prosecutor’s Office’s charter fraud investigation team (Chief Prosecutor Lee Eung-cheol) announced that they had arrested and indicted the rental company Mr. Kang. Realtor A and partner B, who colluded with Kang and received a large amount of kickbacks, were indicted without detention.
Dubbed the “Hwagok-dong villa king,” Kang and his gang are accused of not returning the jeonse deposit to the tenants after purchasing 283 villas from September 2015 to December 2018. So far, 18 victims have been identified, and the total amount of damage is 3.168 billion won.
They received a rental deposit at a higher price than the actual transaction price, paid for the purchase of the villa, and received a return of 5 to 15 million won per villa from the owner. Mr. Kang collected 1 million to 1.5 million won per case, and Mr. A and Mr. B shared the remaining amount. They did not have a single penny of capital invested in buying the villa.
Mr. A and Mr. B recommended the rental business even though they knew that Mr. Kang had no ability to return the deposit. They vaguely expected that the price of the house would increase, and they blocked the deposit with the money they received from the next tenant.
In order to cover up the crime, they showed the tenant a registration document with a false sale price or concealed the fact that the Housing and Urban Guarantee Corporation was in the process of subrogation because it had already failed to return the deposit at the time of the contract.
Most of the victims are known to be newcomers to society in their 20s and 30s or newlyweds. Some were found to have lost their qualifications for housing subscriptions by buying canned houses by ‘crying and eating mustard’ to protect the deposit.
Previously, the Gangseo Police Station received complaints from the victims, investigated the case, and sent Kang and others to the prosecution in August 2020 with the opinion of prosecution. Since then, the prosecution has conducted supplementary investigations.
An official from the prosecution said, “Even though the seriousness of the damage caused by the charter fraud for the non-capital gap investment was reported several times in the media, there were many cases where criminal punishment commensurate with the responsibility was not carried out by pretending to be a normal lease contract in appearance.” We will do our best to maintain the prosecution so that the sentence can be sentenced, and we will continue to investigate the female crimes and similar cases of the accused.”