A Suwon court has upheld a lower court ruling for three members of a fraud ring that scammed victims of their lump-sum "jeonse" housing deposit. 

The Suwon District Court on Thursday sentenced one member, surnamed Choi, to eight years, one of Choi’s accomplices surnamed Kwon to six years and another accomplice surnamed Park to five years. With such sentencing, the court upheld all rulings issued by a lower court, rejecting appeals submitted by the accused and the prosecution. 

In dismissing appeals by the accused, the court said the three defendants have failed to make sufficient efforts or to take steps to compensate for damages, adding that there is enough risk that the victims won’t get their jeonse deposits back. 

The three defendants were indicted for swindling some seven billion won out of 31 people between April 2020 and February 2021 with the scheme of signing leases for villas and studio apartments whose jeonse deposits exceeded the purchase price. 

With the swindled money, the accused were said to have engaged in “gap investments” without capital

The scheme involves the purchase of property with active jeonse contracts for the difference in value against the lump sum paid by the tenant, thereby requiring the new owner to fulfill repayment obligations but also posing an opportunity to flip the property for profit with minimal investment. 

With such schemes, the three were found to have owned some three-thousand-400 villas and officetels across the nation.