Nationwide investigations into public housing organizations reveal irregularities totaling 8.5 billion won in large-scale land sales, surpassing initial estimates. These non-face-to-face transactions, implemented during the COVID-19 pandemic to safeguard vulnerable citizens, instead funneled benefits to insiders and fictitious entities.
Audit Results and Legal Actions
Authorities confirm that probes identified violations in sales exceeding designated thresholds. Officials arrested five executives, including sales and allocation team leaders, while indicting 83 others without detention. The irregularities span 69 cases across the country from late 2021 through early 2025.
The fraud involved the Korea Land & Housing Corporation’s (LH) rental housing support programs and youth housing deposit loan guarantees, where perpetrators exploited entire sales processes to generate 8.5 billion won in illicit gains.
Methods of Fraud and Key Perpetrators
Fraudsters posed as nonexistent apartment sales representatives, public housing brokers, and agency officials. They bypassed priority allocations for low-income families, multi-child households, and other eligible groups, redirecting opportunities to themselves and relatives of major conglomerates.
Internet-based non-face-to-face sales provided a key avenue for deception. Even non-employees accessed credentials and personal data to complete transactions. Single-administrator systems concealed crimes, preventing detection and police reports.
This misconduct blocked legitimate applicants, including dedicated public servants, from securing subsidies and created a secondary wave of failures in housing access.
Ongoing Investigations
Examiners reviewed 56 housing entities and 69 suspicious transactions last April, incorporating audits, asset seizures, recovery negotiations, and content analysis. Current efforts focus on verifying every contract detail and refund processes.
A senior audit official stated, “Public housing sold nationwide using citizens’ personal information for massive sales requires concentrated audits and significant reforms to ensure fairness.”
