Attorney charged with fraud & money laundering in real estate scheme
Authorities are seeking possible additional victims in Texas
An attorney who allegedly took several million dollars in investment capital from clients and used the funds for personal expenses and luxury items was indicted Tuesday by a federal grand jury.
46-year-old Stephen Young Kang, of Newport Beach, was named in a 25-count indictment filed in United States District Court in Los Angeles. The indictment charges Kang with 20 counts of wire fraud and five counts of money laundering.
The indictment comes after Kang was arrested by special agents with the FBI and IRS – Criminal Investigation on August 10th at Los Angeles International Airport as he attempted to board a flight to Seoul, Korea. Kang is currently free on a $750,000
Secured bond.
According to the indictment, Kang defrauded a Gardena-based food distribution company, Ottogi America, Inc., whose representatives hired the attorney to help the company purchase additional properties near its distribution center.
Between October 2012 and March 2014, Ottogi wire transferred approximately $3.7 million to a trust account in Houston to be used for the purchase of the properties.
But Kang allegedly did not use the money to invest in properties. Rather, Kang allegedly caused the vast majority of the funds to be transferred to other accounts that he controlled, and then used a substantial portion of Ottogi’s money to pay for personal expenses and business ventures, as well as to make partial payment to other victims.
Kang is also alleged to have defrauded other victims. According to the indictment, Kang agreed to provide legal and investment services to a married couple who wanted to invest money that would help them obtain EB-5 visas, which requires the applicant to invest at least $500,000 in a commercial enterprise that creates or preserves at least 10 permanent, full-time jobs.
The indictment alleges that these victims wired more than $1 million to Kang in 2011, but Kang failed to invest the money as promised. Instead, Kang used the funds for personal and business expenses, as well as to pay other individuals who previously invested money with him. When the victims demanded the return of their investment, Kang allegedly concealed the fraud by using money he received from other clients, including Ottogi, to repay a portion of their investment.
Kang is scheduled to be arraigned on the indictment on September 8th.
If convicted of the charges in the indictment, Kang faces a statutory maximum penalty of 20 years in federal prison for each of the wire fraud charges and up to 10 years in prison for each of the money laundering offenses.
Based on the evidence in this case, investigators believe Kang may have victimized others in locations where he practiced law or resided, including California, Texas, and Seoul, Korea.
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