UPDATE, SEPT. 2, 2:46 P.M.: Since the announcement Tuesday of a federal indictment against attorney Stephen Young Kang of Newport Beach for allegedly defrauding Ottogi America Inc. of Gardena, more alleged victims have emerged, according to the government.
An FBI statement reveals:
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.
ORIGINAL POST, SEPT. 2, 6:34 A.M.: Stephen Young Kang is accused of 20 counts of wire fraud and five counts of money laundering in the 25-count indictment. The 46-year-old was arrested by special agents with the FBI and Internal Revenue Service on Aug. 10 as he tried to board a flight to Seoul from Los Angeles International Airport.
Representatives of Ottogi America Inc. hired Kang to help with the purchase of additional properties near its Gardena distribution center, wiring about $3.7 million to a trust account in Houston, Texas, between October 2012 and March 2014, according to the U.S. Attorney's Office.
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But instead of investing the vast majority of the funds in properties, Kang allegedly transferred loot to other accounts that he controlled to cover personal expenses, business ventures and partial payments to other victims, according to prosecutors.
The government fear some of Kang's other law clients in California, Texas and Seoul may have also been victimized. Anyone who suspects that could be them is asked to call the FBI's Los Angeles Field Office at 310.477.6565.
Kang faces up to 20 years in federal prison for each wire fraud charge and up to 10 years for each money-laundering offenses. He is to be arraigned next Tuesday.