"Rental Firm and Brokers Colluded to Pocket 4.1 Billion Won"... Jeonse Fraud Ring That Bilked Tenants Referred to Prosecutors

Rental Corporation Head, Brokerage Assistant Arrested in Jeonse Fraud Case

A jeonse fraud ring that misappropriated more than 4 billion won by diverting tenants' jeonse deposits to fund construction of new buildings has been referred to the Prosecution Office.

Seoul Dongjak Police Station said on November 10 that it had arrested and referred to prosecutors the head of a rental corporation, identified as A, and a brokerage assistant, identified as B, on charges including fraud. It also referred without detention four people, including A's father, identified as C, who chairs the rental corporation, and three licensed real estate agents.

According to police, A and others are accused of defrauding 33 tenants out of approximately 4.1 billion won in jeonse deposits at four multi-household buildings in Dongjak-gu, Seoul, between December 2020 and April 2025. They allegedly told the tenants falsely that "the buildings are worth tens of billions of won and have only small senior-priority deposits, so there is absolutely no problem with returning the deposits."

Investigators found that A, head of the rental corporation, and his father, chairman C, had expanded their business by building properties with virtually no capital of their own. They financed about 70% of the land purchase costs with secured loans, and covered about 70% of construction costs with bank loans disbursed according to construction progress. Once a building was completed, they used tenants' jeonse deposits to settle construction costs, then put the remaining deposits toward purchasing land for other buildings and repeated the process.

Police confirmed that brokerage assistant B effectively operated a real estate agency by putting three licensed real estate agents forward as so-called "figurehead owners." B handled lease contracts for the multi-household buildings and was found to have collected kickbacks exceeding the legally permitted brokerage fees for each contract.

Police said they would continue investigating to identify any additional victims and trace the flow of the misappropriated funds to secure hidden assets and help recover victims' losses. A police official advised, "When signing a lease, you should check not only the mortgage rights listed in the property register but also the building's actual value and the total deposits of tenants with senior priority." The official added, "Buildings with excessive secured loans or senior-priority deposits carry a high risk that tenants will not get their deposits back."

This content was produced with the assistance of AI translation services.