'Villa king' puppet master, 77 others, arrested, police say

Economy

Published: 13 Jan. 2023, 18:40 Updated: 13 Jan. 2023, 18:52

'Villa king' puppet master, 77 others, arrested, police say

A real estate agent accused of a massive housing rental scam leaves the court in southern Seoul on Thursday. [YONHAP]

Dozens connected to the "villa king" have been arrested for taking part in what police claim was a massive effort to defraud people out of their housing deposits.

The police say that one of those arrested may be the true mastermind, rather than the villa king, and may have hatched many other similar schemes.

The 78 have been charged for not returning 8 billion won ($6.4 million) to 37 tenants.

Under the jeonse system, people can live rent-free for a fixed term in exchange for a massive deposit, which for cheaper properties can be close to the value of the units.

In total, the villa king acquired 628 units in areas including Gangseo and Yangcheon districts in western Seoul and Incheon from 2017 through 2020.

Those arrested include a real estate consultant, said by the police to be the kingpin, and others who funneled clients into the scheme.

“The contract was signed without notifying the tenants that the units were purchased entirely using the victim's jeonse deposit,” said the police.

The police are expanding the investigation, saying it is possible there are more villa kings that bought a large number of units under the direction of the real estate consultant.

According to the police, the real estate consultant worked together and conspired with a villa king, who died on Jeju Island in July 2021. This scam involved 240 units.

To prevent this kind of jeonse fraud, clauses should be included saying that a jeonse contract is canceled in cases where the tenet cannot be insured by a policy from the Housing & Urban Guarantee Corporation (HUG), the police said.

Kim Jin-yoo, a professor who teaches urban planning and transportation at Kyonggi University, advised potential tenants to “check whether the deposit rate is 70 percent or below” to make sure they are not defrauded.

BY KIM JUNG-MIN, JIN MIN-JI [jin.minji@joongang.co.kr]