Police Arrest Head of Real Estate Consulting Firm, the Figure Behind the Dead “Villa King”

The Seoul Metropolitan Police Agency / Kim Young-min

The police caught the head of a consulting firm and accomplices in fraud, who were the masterminds behind Jeong, the “villa king” who died in Jeju in 2021. This group cheated tenants out of their rent deposits by making gap investments with no capital in the greater Seoul area.

The Financial Crime Investigation Division of the Seoul Metropolitan Police Agency announced on January 13 that they arrested 78 people including Shin, the head of a real estate consulting firm, and Gim, a rental property businessman, who schemed frauds in the Seoul metropolitan area from July 2017 to September 2020. The Seoul Central District Court issued an arrest warrant for Shin on Thursday. Gim, the other principal culprit, was arrested on December 28.

According to the police, Gim purchased 628 houses in Gangseo-gu and Yangcheon-gu, Seoul and in Incheon and cheated 37 tenants out of their deposits amounting to 8 billion won.

The fraudsters targeted low budget multiplex homes high in demand in the rental market, and particularly homes where “simultaneous proceedings” were possible. Simultaneous proceedings refer to a method of purchasing property where the buyer buys the property without any capital by signing a lease contract with a tenant first and paying for the property with the rental deposit.

Shin was the person behind Gim. Shin also used Jeong, the villa king who died in Jeju in July 2021, as one of the property buyers. The police analyzed bank transactions and found that the money Gim swindled flowed to Shin and identified them as accomplices. The police expect to find many more people who were named as the owners of property, referred to as “puppet owners,” from the contracts in Shin’s cell phone, which the police seized.

Their arrangement consisted of a consulting firm, a rental property business, a real estate sales firm specializing in newly constructed property, and the people who were named as the home buyers (puppet owners). They divided their roles into searching for property to purchase, gathering tenants, and drawing up contracts and committed the fraud in an organized manner. They also obtained millions to tens of millions of won per case in kickbacks, which were recorded as sales and consulting fees, from the tenants. This way, they gained illegal profits of 800 million won, of which Shin reportedly took 120 million won.

A police representative announced that they would continue investigating Shin and schemes with other villa kings.