Thursday, March 11, 2010

Orange County crime story of the day: Ponzi scheme, he wrote.

In a follow-up to this story from March 2009 (where Brian in Chŏllanam-do describes his own inclination for murder! Murder!!!) about this news, it looks like the Korean-American couple behind a Ponzi scheme that was ripping off other Korean immigrants have been caught:
Federal agents have arrested a couple that ran an Irvine investment firm, saying they were the architects of a Ponzi scheme that cheated some 60 Korean American investors out of $8 million.

Euirang Hwang, 36, chairman of Pinupitu Inc., and his girlfriend, Sang Yi, 39, were arrested at a Corona house at 6:50 a.m. Tuesday on federal wire fraud charges.

The duo orchestrated a Ponzi scheme that targeted 60 Korean American investors throughout California, promising them annual returns of between 24% and 45%, according to the Feb. 3 four-count federal grand jury indictment.

A Santa Ana judge Tuesday ordered Hwang and Yi held without bail.

Hwang allegedly solicited business from the Korean American community from 2006 to 2009, recruiting trusted business people and church leaders and presenting himself as a billionaire with holdings in 60 real estate and computer and office equipment companies in Korea, Japan and China. He told them he generated income by buying up small companies and selling them for profit.

Hwang founded the company and operated its Irvine offices, which at one point claimed 20 employees, and Yi, a South Korean citizen, allegedly controlled its finances as president and secretary.

According to the U.S. attorney’s office, the firm used the money collected from later investors to wire hundreds of thousands of dollars to Yi’s mother in Korea, pay for luxury car leases, personal and office expenses and to pay returns to earlier investors.

“They were doing it in large part just to have the aura about them of being successful,” said Assistant U.S. Atty. Joseph McNally. “A lot of the money was used to put on this front of having a legitimate business.”
The Orange County Register also has the story.

As my own link above suggests, beware of get-rich-quick schemes. There's no such thing as a free lunch. Save your money, kiddies, and invest in something tangible and real, like a house. Or a restaurant. I know I sound like I'm channeling my father circa 1992 when I say this, but there's nothing wrong with hard work and honest earnings. Isn't the whole mess we're in now because of financial shell games and a collective burning desire to be rich?

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