Scheme Real Estate Share-Splitting Yields Unjust Profits of 2.6 Billion Won...Fraudulent Applicants Caught en Masse

[Suwon Ilbo=Park No-hun Reporter] A total of 178 illegal real estate speculators, including scheme real estate operators who purchased land in the names of relatives and reaped unjust gains through share-splitting methods, and fraudulent applicants for Gwacheon Knowledge Information Town apartments sold last year, were caught in Gyeonggi Province crackdowns.

The unearned gains obtained by these individuals amount to 143.4 billion won.

Kim Young-soo, Chief of Gyeonggi Province Fair Trade Special Investigation Police, held a press conference at Gyeonggi Province Government Office on the 14th and announced the results of a "Planned Investigation into Scheme Real Estate and Other Illegal Real Estate Speculation."

Chief Kim stated, "From March to May this year, we conducted a planned investigation into violations of real estate transaction order, including unqualified and unlicensed brokerage activities by scheme real estate companies and fraudulent applications for Gwacheon Knowledge Information Town apartments, which recorded an application-to-subscription ratio of 245:1 last year, and identified 178 individuals." He added, "Of these, 17 have been referred to prosecutors, 79 have been criminally charged, and 82 are under investigation."

Looking at major identified cases, representatives A and B of a comprehensive design corporation established a corporation for the purposes of sales agency and real estate consulting, then purchased a total of 11 parcels of land, 11,426 square meters, located in Siheung City and Pyeongtaek City in the names of five relatives for approximately 1.8 billion won.

Subsequently, they hired approximately 30 consultants, including housewives and unemployed youth, and conducted false promotional activities claiming that "significant development incentives such as casinos in the vicinity are expected to generate capital gains." They then sold land to 135 unspecified individuals through consultants' acquaintances and contacts via share-splitting methods at 4.4 billion won, higher than market prices, within seven months, thereby obtaining a total of 2.6 billion won in unjust gains.

A total of 176 fraudulent applicants for Gwacheon Knowledge Information Town apartments were also identified.

Applicant C, whose disabled father is admitted to a nursing facility in Uiwang City, prepared evidence materials such as extending his father's previous residential contract period in Gwacheon City and paying monthly rent to receive an additional 15 bonus points for resident grade under special supply for the disabled, and won the drawing.

Applicant D, to receive an allocation under the special supply for supporting elderly parents, which had a lower competition rate (general supply 458:1, special supply 95:1) than general supply for Gwacheon Knowledge Information Town apartments, reported his maternal grandmother, who resides in a nursing facility in Iksan City, Jeollabuk-do, as a household member transferred to Gwacheon City and received the apartment allocation.

Applicant E, while residing in Seongnam City, fraudulently registered as a household head at a relative's home in Gwacheon City to receive a supply allocation prioritized for Gwacheon City residents, and applied for the Gwacheon Knowledge Information Town first-time homebuyer special supply.

As a result, he won in the priority supply lot of 30% allocated only to those who have actually resided in Gwacheon City for more than one year.

Considering that the premium for the apartment is currently formed at 700 million to 800 million won, the province estimates that 176 individuals obtained unjust gains amounting to 140.8 billion won through this method.

Under current laws, unqualified and unlicensed real estate brokerage agents and fraudulent applicants face imprisonment of up to three years or fines up to 30 million won, and fraudulent applicants have their sales rights canceled and must pay 10% of the contract amount to the developer as penalty.

Chief Kim Young-soo of the Fair Trade Special Investigation Police stated, "To establish fair real estate transaction order and eradicate unearned real estate gains, we plan to expand investigations into fraudulent applications targeting apartments that had high application-to-subscription ratios last year, and will particularly focus on comprehensive investigations into share-splitting brokerage methods by scheme real estate companies."