Los Angeles Man Indicted For Money Laundering Of $1.9 Million Stolen From Appalachian State University
CHARLOTTE, N.C. – Ho Shin Lee, 31, of Los Angeles, California, was indicted by a federal grand jury in Charlotte for laundering more than $1.9 million stolen from Appalachian State University, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. The 14-count indictment was unsealed today, following Lee’s arrest in California.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Murray in making today’s announcement.
According to allegations contained in the indictment, on or about November 18, 2016, Lee applied to the Secretary of State of California to register Royce Hub Trading, Inc. as a corporation in California, claiming that the corporation was in the business “general merchandise.” Lee represented himself to be the Chief Executive Officer, Secretary, and Chief Financial Officer of Royce Hub Trading. The indictment alleges that on or about November 23, 2016, Lee opened a bank account with a financial institution in Los Angeles in the name of Royce Hub Trading, Inc. Lee claimed to be president of Royce Hub Trading and was the sole account holder.
Court documents indicate that in 2016, Appalachian State University (“Appalachian State”) awarded a contract to Rodgers Builders to build a new health sciences building at the university. On or about December 2, 2016, an employee at Appalachian State received an email from an unidentified individual purporting to be D.M., an employee of Rodgers Builders. The e-mail was sent from email@example.com (link sends e-mail). The legitimate e-mail address for Rodgers Builders was “rodgersbuilders.com.” The fraudulent e-mail contained a direct deposit form and instructions to change Rodgers Builders’ previously submitted banking information to Lee’s newly opened bank account.
The indictment alleges that the Appalachian State employee changed the payment information as directed by the fraudulent e-mail, and on or about December 8, 2016, a payment of approximately $1,959,925.02 intended for Rodgers Builders by Appalachian State was directed to the bank account controlled by Lee.
According to the indictment, on or about December 12, 2016, Lee received the fraud proceeds, and quickly transferred the funds through a series of financial transactions out of his bank account, knowing that the transactions were designed to conceal the nature, location, source, ownership, and control of the fraud proceeds.
Lee is charged with fourteen counts of money laundering. The maximum penalty for the each charge is twenty years in prison and a $ 500,000 fine.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The FBI investigated the case. Assistant U.S. Attorney Kelli Ferry is in charge of the prosecution.
Appalachian State University To Receive $1.5 Million Distribution Resulting From U.S. Attorney's Office Civil Forfeiture Action
U.S. Attorney’s Office Collects $23.4 Million in Civil and Criminal Actions in Fiscal Year 2017
CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced that $1,542,442.33 will be distributed to Appalachian State University (ASU) following successful civil forfeiture proceedings against money seized from bank accounts controlled by alleged fraudsters and money launderers who targeted the higher education institution.
U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte office.
“Today’s announcement is an example of the results we get when we use civil forfeiture laws to swiftly stop crime and provide financial relief to victims of fraud,” said U.S. Attorney Murray. “In this case, the FBI located and seized the stolen funds even before criminal investigative targets had been identified or a criminal case had been filed. Under these circumstances, civil forfeiture is the only area of law that enables law enforcement to swiftly obtain warrants to secure stolen funds, and to prevent the perpetrators of fraud from accessing them. Identifying and seizing ill-gotten gains and returning forfeited funds to victims is a priority for my office. I will use all of the tools at my disposal to make victims whole, and civil asset forfeiture is an invaluable tool in that arsenal.”
According to allegations contained in the civil forfeiture complaint, beginning in or around December 2016, one or more alleged fraudsters convinced ASU staff to forward over $1.9 million to one or more companies operated by them. According to court records, the fraudsters posed in emails as a legitimate construction company building ASU’s new health sciences facility. After receiving the funds, the alleged fraudsters used numerous bank wire transfers to launder the money among various companies.
Court records indicate that, upon discovery of the fraud, ASU notified the FBI and fully assisted in the investigation. The FBI ultimately located $1,542,442.33 of the money dispersed in multiple bank accounts and obtained forfeiture seizure warrants for it, preventing the wrongdoers from absconding with ASU’s funds. Following that, the U.S. Attorney’s Office filed a civil complaint in federal court. Upon conclusion of the civil forfeiture case, the Department of Justice’s Money Laundering and Asset Recovery Section authorized distribution of all forfeited funds to ASU.
In making today’s announcement, U.S. Attorney Murray commended the work of the FBI. U.S. Attorney Murray also thanks ASU officials for their prompt efforts to notify law enforcement of the fraud.
Assistant United States Attorney Benjamin Bain-Creed of the United States Attorney’s Office in Charlotte handled the proceedings. (Docket No. 5:17-cv-81)
Criminal and Civil Actions Collections in Fiscal Year 2017
In Fiscal Year 2017, the Western District of North Carolina (WDNC) collected $23,476,979.90 in criminal and civil actions. Of this amount, $4,719,016.01 was collected in criminal actions and $18,757,963.89 was collected in civil actions. Additionally, WDNC worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $7,216,680.36 in cases pursued jointly with these offices. Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Justice Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The U.S. Attorney’s Office, working with partner agencies and divisions, also collected $2,768,013 in asset forfeiture actions in FY 2017. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
“Every day, federal prosecutors and staff in the U.S. Attorney’s Office work hard to protect the citizens of the Western District of North Carolina and to ensure that criminals do not profit from their illegal activities,” said U.S. Attorney Murray. “Their diligent efforts enable us to achieve justice, recover taxpayer dollars, secure restitution for victims of federal crimes, and protect the public from fraud, waste and abuse.”
Tags: Financial Fraud