A group of 88 individuals has been arrested for defrauding approximately 8.5 billion won through fraudulent jeonse loan agreements aimed at vulnerable housing groups in South Korea.
The Jeonbuk police have apprehended a group of 88 individuals who exploited the jeonse lending system designed for vulnerable residents to embezzle around 8.5 billion won (approximately $7 million). This group created false contracts and misused government-backed loan schemes, pooling their efforts under structured roles such as managers and fake tenants to execute their fraudulent activities. The authorities report that the scams took place from 2021 to 2025, with the group successfully securing non-face-to-face loans by presenting fake documents like rental agreements and registration certificates.
The fraudulent actions revolved around scamming the system set in place to help economically disadvantaged individuals, including newly employed young adults, by posing as fake tenants. These individuals maintained the appearance of legitimacy by paying rent and interest on leases they never truly occupied. This organized effort not only caused losses to the lending institutions but also created 'empty houses' that could lead to further financial ruin, as landlords attempted to rent these properties to third parties to offset their losses.
After receiving intelligence regarding the fraud involving the jeonse rental support program, police initiated an investigation that uncovered numerous pieces of evidence, including fake contracts, ledgers, mobile devices, and transaction records from financial accounts. Authorities have confirmed 69 instances of fraudulent contracts from 56 multi-family dwellings, and they have stated their commitment to recovering the illicit gains deriding from this scheme. The police emphasized their determination to rigorously pursue cases involving crimes that abuse public resources meant for helping citizens in housing need.
