30-Year-Old Sentenced to 15 Years for Massive Rental Fraud in Busan
A 30-year-old man has been sentenced to 15 years in prison for orchestrating a rental fraud scheme that defrauded victims of approximately 8.47 billion KRW (around $7 million) using a method known as 'no-capital gap investment.' On June 11, the Busan Eastern District Court's Chief Judge Jeong Wang-hyun handed down the maximum sentence for fraud to the main perpetrator, identified as A, while two accomplices, B and C, also in their 30s, received sentences of 9 years each.
From December 2019 to February 2023, A purchased three officetels (office-tels) in the Suyeong and Geumjeong districts without any personal capital, relying solely on loans and the security deposits from tenants. He is accused of deceiving over 80 victims by collecting a total of 8.47 billion KRW in deposits.
The scheme involved setting the rental security deposits higher than the purchase prices, allowing A to pay the previous owners while pocketing the excess deposits as profit. B and C, who were acquaintances of A, participated in the scheme as both buyers and landlords, misleading tenants by falsely assuring them that they would be covered by rental insurance, despite being ineligible for such coverage.
Judge Jeong stated, "The rental deposits represent the hard-earned savings of the victims, who suffered not only significant financial losses but also severe emotional distress. The defendants used the money to build new properties, purchase luxury cars, and invest in cryptocurrencies, which raises serious ethical concerns."
He further noted that while A led the operation, he showed no remorse, denying his involvement as a direct buyer. B and C claimed they merely followed A's suggestions, but the judge emphasized that they must have recognized the risks involved and chose to ignore them for personal gain.
Under South Korean law, the maximum penalty for fraud is typically up to 10 years in prison, but the court can impose a maximum of 15 years when multiple offenses are considered together.
