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Special Government Task Force Identifies 2,849 Property Speculators

Special Government Task Force Identifies 2,849 Property Speculators

Posted September. 07, 2005 06:34,   


The government has created a special investigative task force composed of members from the prosecution, police, the National Tax Service and the Ministry of Construction and Transportation, headed by the director of the criminal division at the Prosecutor General’s Office, Lee Dong-ki, to root out real estate speculation. The special unit said on September 6 that it had booked a total of 2,849 people on charges of property speculation and arrested 147 of them in a special crackdown launched between July 7 and August 31.

The joint investigation headquarters particularly targeted so called “planning realtors,” which provide false information to people through telemarketers and entice them to buy real estate that those agencies have previously bought at extremely high prices--sometimes 10 times the original buying prices. As a result, the special unit cracked down on 23 planning realtors, booked 124 people and plans further action against 46 of them.

The prosecution said that after the crackdown they found that around 3,800 people were financially damaged and the cost amounted to 120 billion won. The special task force team also revealed that offenders include a number of public servants, housewives, and even people with professional occupations such as lawyers and doctors.

The team is planning to form another special unit that will launch a crackdown on property speculation in newly developed areas such as Geoyeo new town, Songpa-gu Seoul, which already shows some signs of price jumps in property trading.

Most Lands Recommended by Planning Realtors Are Barren-

Agency “A” lured around 104 people and earned about 10.8 billion won while giving false information that certain areas of Jecheon-si would be developed as tourism attractions and that investors could earn three or four times more than their original investment. However, it turned out that the land cannot be sold to individuals, and regulations limit building in the area. The agency ran five branches that buy property and was called an “academy” among planning realtors, according to the prosecution.

Planning realtors “B” and “C” bought land near Hwajinpo, Goseong-gun and Jinbu-myeon in Pyeongchang-gun Gangwon, which is impossible to be developed since the area was designated as military facility protection area or preservation area. The companies deceived people by giving wrong information that a tourism district would be developed near Lake Hwajin and that the price of land would increase if the Winter Olympics is held there, and sold land at a much inflated price of 350,000 won per pyeong which they bought for prices ranging from 15,000 to 30,000 won.

Planning realtors often enjoy the use of called “chopping tactics,” in which they buy a big plot of land and sell it in pieces. Agency “D” purchased around a 10,000 pyeong plot of forests and fields at 60,000 won per pyeong after an industrial complex development plan for an area in Chungju-si, Chungbuk was announced and sold the land to people at 300,000 per pyeong after dividing it into 44 pieces.

Sister Speculators-

A woman in her early 30s and her sister earned a windfall of around 1.77 billion won by borrowing in their relatives’ names. Known as “Jo” (32), she received distribution rights for five 32-pyeong apartments in Gangnam built by a housing association in August 2002 by using her relatives’ names or camouflaged move-ins. Her sister one year younger than her also received distribution rights for six 24-pyeong apartments.

They were able to earn 940 million won and 830 million won respectively by getting the rights. Reportedly, Jo owns ten apartments, 32 stores and 24 office rooms.

The prosecution accused Jo of confusing the current housing supply laws (a violation of the housing laws) and booked her sister without detention.