Family 'Jeonse' Fraud Ring with Chinese Mastermind Sent to Prosecutors for $14 Million Scam

A 'family' real estate fraud ring, with its ringleader operating from China, has been handed over to prosecutors for allegedly defrauding 120 tenants of roughly 19 billion won (approximately $14 million USD). The group is accused of constructing over 10 multi-family homes and using rental deposits to cover previous obligations in a 'gap investment' scheme. This practice, common in South Korea, involves buying properties with minimal personal capital by leveraging tenant deposits and loans. The Seoul Gwanak Police arrested 16 individuals, including the alleged mastermind, identified as Hong, his wife, and other relatives. Hong, reportedly in China, is currently under suspended investigation, while his wife received a 10-year prison sentence in her initial trial. The ring allegedly operated from 2018 to 2023, targeting tenants in Seoul's Gwanak district and surrounding areas. They are accused of pocketing approximately 19 billion won from 128 victims through rental deposits and loans used to build the properties. Hong is said to have managed the overall operation, including property acquisition and securing nominal owners for the constructions.