Warning about a new type of lease scam featuring dozens of 'pants landlords' instead of 'villa kings'

A group involved in a 10 billion won lease scam, using a landlord who only lent their name for a 'pair of pants,' has been caught.

Ulsan Police Agency announced on the 10th that they have detained Mr. A, the CEO of a real estate consulting firm, on charges of fraud, and have booked 42 individuals involved in jeonse fraud, including licensed real estate agents.

Mr. A's daily earnings involved recruiting landlords in Seoul, Incheon, and Hanam City within the metropolitan area who wanted to sell villas during the severe rental shortage in 2021, as well as credit delinquents willing to lend their names and people in urgent need of money, and licensed real estate agents to notarize housing sales contracts.

They purchased 53 villas at the price desired by the villa owners, then leased them out at a higher rent than the actual purchase price, and pocketed the difference.

For example, they purchased a villa worth 250 million won and leased it under a jeonse contract for 300 million won. Of this, 250 million won was paid to the villa owner, and the remaining 50 million won was divided among them. Using this method, they pocketed 11.5 billion won.

Because it is difficult to verify market prices for villas, they were targeted as victims. The people who lent their names contacted to obtain small loans and became involved in the crime. Most of the tenants were confirmed to be either recent graduates or in their 30s.

The individual known as the so-called 'Villa King' was able to avoid suspicion from victims because their initial lease fraud crime involved owning hundreds to thousands of empty houses, which was different from typical cases.

A police official said, "They exploited the loophole that the Housing and Urban Guarantee Corporation (HUG) prioritizes appraisal prices when reviewing jeonse guarantee insurance applications," and added, "Unlike existing jeonse scams that only target villa owners, this was carried out by a covert organization, making the investigation difficult."

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Jeonse fraud is still rampant...

But what is the reason for neglecting to stop these crimes from continuing to flourish?

We need to deliver a proper and ruthless punishment to completely wipe them out...