Man given 12 years in prison for mortgage fraud

A court on Monday sentenced a man to 12 years in prison on charges of fraudulently obtaining more than 8 billion won ($5.45 million) by tricking a victim into lending the money against a multi-housing unit with zero collateral value.

The Incheon District Court convicted the 60-year-old man of forging 107 documents to deceive the victim into believing that the property was occupied by monthly rent-paying tenants, although it had been leased on jeonse deposits.

Under Korea's unique jeonse system, tenants hand over a large lump-sum deposit to the landlord instead of paying monthly rent, and the full deposit must be refunded at the end of the lease term.

An accomplice of the convicted man allegedly took ownership of the property, including payment obligations of the jeonse deposit. The defendant is accused of luring the victim to lend money to the accomplice with the property as collateral. If the sale price of a housing unit equals the jeonse deposit amount, the property holds no actual collateral value.

Believing the forged documents on monthly rent-paying contracts were authentic, the victim lent a total of 8.22 billion won across 119 transactions between 2021 and 2022, and the defendant swindled the money.

The defendant was convicted of violating the Act on the Aggravated Punishment of Specific Economic Crimes, which carries a sentence of up to life imprisonment.

Yonhap