22 December – LAWFUEL – The Law News Network – The owner and operator of the now-defunct downtown investment advisor firm C+ Capital Management, LLC has pleaded guilty to a host of federal charges related to an investment fraud scheme in which he fleeced primarily Korean-American investors out of more than $20 million.
Won Charlie Yi, 35, of Los Angeles, pleaded guilty late Tuesday to 19 charges. Appearing before United States District Judge A. Howard Matz, Yi pleaded guilty to four counts of bank fraud, 11 counts of mail fraud, two counts of investment advisor fraud and two counts of criminal forfeiture.
Yi was previously charged with bank fraud, and he was taken into custody in Arizona in April 2005 after fleeing to South Korean one year earlier. Yi carried out his investment fraud scheme through C+ Capital Management, which raised well in excess of $20 million by inducing members of the Korean-American community to invest funds with a promise of large returns. The investors were told that their money would be invested in accounts at a New York-based broker-dealer, Carlin Equities Corporation, which Yi and his associates said had a branch in Los Angeles. Yi and his associates told victims that their money would be invested in publicly-traded companies and Regulation S offerings. Investors were provided with fabricated monthly account statements showing gains in their accounts, and the victims could view the false account statements on an elaborate Internet site.
In fact, the accounts were never opened at Carlin Equities. Instead, the investors’ funds typically were deposited into bank accounts at Wells Fargo Bank controlled by Yi or his associates at C+ Capital. When investors sought to withdraw their investments, Yi and others at C+ Capital lulled the investors by giving them various reasons why their holdings could not or should not be immediately liquidated. Ultimately, they fled to Seoul. Before their flight, Yi and his associate, Jong-Jin Lee, who was also indicted for bank fraud in April 2005, overdrew the Wells Fargo accounts by more than $2 million, which he caused to be wired to South Korean banks.
As a result of his guilty pleas yesterday, Yi faces a maximum possible sentence of 350 years in federal prison.
Lee is a fugitive who is believed to be in South Korea.
Yi is scheduled to be sentenced by Judge Matz on April 26.
This case is the product of an investigation by the Federal Bureau of Investigation.
CONTACT: Assistant United States Attorney Paul G. Stern
(213) 894-0715
