Police said Friday they have arrested 78 people in a massive housing rental scam that caused a combined unpaid sum of 8 billion won ($6.5 million) in deposits belonging to dozens of tenants.

An investigation came as the tenants were unable to reclaim their housing deposits after their landlord -- referred to as a "villa king" by local press for owning hundreds of properties -- died before paying his tenants back.

Among the suspects are a real estate consultant surnamed Shin who allegedly masterminded the purchase of 628 properties in Seoul and the surrounding area between July 2017 and September 2020 under the names of the deceased villa king and another king, surnamed Kim, according to the Seoul Metropolitan Police Agency.

All of the properties were small-sized residential buildings that are more commonly known as villas in South Korea and are usually three to five stories high and cheaper than apartment complexes.

The SMPA said the properties were rented through an agreement called "jeonse," in which tenants give their landlord a large amount of upfront deposit instead of paying monthly rent. Then, the landlord earns interest off the deposit and returns the deposit at the end of the lease.

The SMPA said the suspects were unable to return deposits to a total of 37 tenants, as the properties were purchased with the deposits paid by other tenants.

The suspects each had a role in the organized scam, such as searching for a property and finding a tenant, and they earned criminal proceeds totaling 800 million won, the SMPA said. (Yonhap)