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Ponzi Scheme Targeted Korean Americans

More news stories on Asian Immigrants

Henry K. Lee, San Francisco Chronicle, June 10, 2009

A Danville man is facing civil and criminal charges in federal court for allegedly defrauding 500 investors of $80 million in a Ponzi scheme and using the money to pay the mortgage on his multimillion-dollar home, authorities said Tuesday.

Peter C. Son, 37, along with Jin K. Chung, 46, of Los Altos, bilked Korean American victims by promising them extraordinarily high annual returns—up to 36 percent—from foreign currency trading, according to a suit filed Tuesday by the Securities and Exchange Commission in U.S. District Court in San Francisco.

Son also is facing separate criminal charges for the alleged scheme, but details of the investigation by the FBI remained under seal Tuesday. Son appeared Monday in U.S. District Court in Oakland. He is being held without bail at a downtown Oakland jail.

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Instead of trading investors’ money, the two men used the funds to pay cash “returns” to certain investors in a “Ponzi-like fashion” from 2003 to 2008, the SEC said. Son also misappropriated money for his personal use, including paying the mortgage on his $2.6 million home in Blackhawk and paying for his homeowner’s association dues and country-club dues, the suit said.

The alleged victims are from California, four other states, South Korea and Taiwan, the SEC said.

Marc Fagel, director of the SEC’s San Francisco regional office, said the men actively sought the people they ultimately victimized.

“They placed ads in Korean-language newspapers and used sales agents to target Korean Americans in typical affinity fraud fashion as they preyed on the trust within close-knit communities,” Fagel said.

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In October, the men ceased the companies’ operations without warning investors, the SEC said. Chung drained the companies’ bank accounts, transferring investor funds to accounts they controlled overseas, the suit said.

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Original article

Email Henry K. Lee at hlee@sfchronicle.com.

(Posted on June 11, 2009)

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Comments

1 — Anonymous wrote at 10:01 PM on June 11:

If you prove you can invest $500,000 in America, you can immigrate here. Asians have a scheme where the same ‘investment’ money changes hands to a different family members name as family member after family member immigrates here. There’s a Ponzi scheme alright but targeting America.

2 — Anonymous wrote at 5:20 AM on June 12:

I don’t see why this is anything significant. Don’t whites prey on whites, in fact in my experience, con men usually target people of their own race. After all both the criminal and the victim feel more comfortable around each other, and the con artist is more likely to get a catch. If Mr. Chung, were to go up to a black, he would be rejected, just like a white man wouldn’t be able to con an asian, hispanic or black. Does anyone agree?

3 — Anonymous wrote at 5:57 PM on June 12:

East-Asians seem to be more controversial on this site than the more obvious… I’ll call them “irritant groups,” that cause so much trouble in The West. I think this is because they are threatening to Whites in ways that other ethnic groups are. Of all the peoples in the world, the group consisting of Chinese, Koreans, Japanese and arguably Thai and Vietnamese as well, are the only people who have demonstrably matched the White Man in industrial prowess. Standardized (AKA scientific) tests show East-Asians matching and sometimes outperforming Whites in most cogitative function. Theirs are the only economies that compare in any way to those of North America (by which i mean Canada and the USA) and Europe.
Of course this does not mean that there won’t be problems when you allow millions of them to immigrate into White countries but this is something Australia and perhaps New Zealand will have to deal with as they only make up 1%-2% of the United States.

4 — Michael C. Scott wrote at 5:34 PM on June 14:

This isn’t a suprise; folks trust other people the most like them, and con-artists know it.

5 — Lygeia wrote at 4:41 PM on June 20:

To Anonymous at 5:57pm

The Chinese, Koreans, Japanese (and arguably Thai and Vietnamese) are only good at imitating our industrial prowess. Yes, they can do us one better at manufacturing more precisely the product we invent using our technology, but they do not innovate.

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