Investigators from South Korea’s state-run deposit insurer have announced their largest overseas illegal assets haul ever after they tracked down and recovered large land holdings owned by a Korean fraudster near Phnom Penh.

The haul, worth some $8 million, sheds light on the use of the Kingdom’s booming property market as a method of stashing illegal proceeds from abroad, along with representing another case of a South Korean property investment in Cambodia being financed by illegal loans.

It also comes as South Korean authorities vow to step up plans to crack down on assets illegally hidden abroad to boost tax revenue, the Korea Times newspaper reported last Thursday.

According to a report from the Korea Deposit Insurance Company released on November 11, a mysterious businessman known only as Mr Jang bought up 100 hectares of land from 2004 to 2009 in Russei Keo district with money he acquired from a 98 billion won ($83.6 million) loan fraud scheme with the Eutteum Mutual Savings Bank.

Jang never paid the money back, buying the land under a borrowed name until he bankrupted Eutteum and was sentenced to three years in prison.

But following his release in 2013, Jang moved to Cambodia and switched the land titles to his real name in an attempt to sell off the ill-gotten holdings.

The KDIC began lawsuits in Cambodian courts to seize the assets, but became mired in Cambodia’s “insufficient” legal structure, with the KDIC’s motions to be granted the assets repeatedly being cancelled without decision, according to the report.

“The possibility of recovery became extremely unclear and unlikely,” it read.

The KDIC was finally able to recover the assets by putting advertisements in local papers saying the land’s seller was a recognised fraudster. A local businessman, who had bought the land from Jang, saw the ad and arranged to pay roughly $8 million for the land to the KDIC, as opposed to Jang, over the next six months.

Although Jang’s current status and whereabouts are unclear – the KDIC in Seoul did not respond to comment as of press time – the case illustrates how some foreigners use the local property market to escape the law, industry insiders said.

“This kind of investment happens to some countries, especially in under[developed] and developing countries, where the law is not strong or clear enough,” Kim Heang, president of the Cambodian Valuers and Estate Agents Association, wrote in an email.

“Yes, it is [time] for Cambodia to stop those kind of investments.”

Jang’s case also represents another incident of South Korean property projects being financed by illegal loans.

In 2012, two executives behind high-profile South Korean developments – Camko City and a billion-dollar Siem Reap airport – were convicted in South Korea of using illegal loans to finance their Cambodia projects.

Nguon Chhayleang, chief operating officer of Ratanaka Realty, noted that projects bankrolled by dubious foreign cash could push up prices, making it unaffordable for those who have “real demand” to buy land.

Officials at the Ministry of Land Management, Urban Planning, and Construction declined to comment for this article.

Additional reporting by Soo Jin Kim