8 June – LAWFUEL – The Law News Network – Two New Jersey residents who operated a $2.7 million “bust-out” scheme in the Koreatown section of Los Angeles have been convicted on a host of federal fraud charges and today a jury determined that two luxury homes they purchased with their ill-gotten gains should be forfeited.
Mi Suk Yi, 38, and her husband, Paul Amorello, 48, both of Saddle River, New Jersey, operated an elaborate fraud scheme in which they defrauded five banks out of $2.5 million and then laundered more than $1.2 million of the funds. They eventually used the money to purchase two homes. Essentially, from April 2000 until December 2002, Yi and Amorello exploited loopholes in the banks’ credit line programs to obtain the money and then created fake identities to hide and launder the money.
The bulk of the criminal charges were decided last Wednesday by a federal jury in Los Angeles. Both defendants were convicted of conspiracy and 12 counts of bank fraud. Yi was also found guilty of furnishing false information to the Commissioner of Social Security and 11 counts of money laundering. Amorello was also found guilty of misusing a social security number, structuring a transaction to avoid the requirement that cash transactions of more than $10,000 be reported to the Internal Revenue Service and six counts of money laundering.
Today, the jury in the case found that the defendants’ should forfeit the two homes that they purchased in New Jersey with proceeds from the fraud scheme.
The bank fraud charges related to a scheme that cost Bank of America, Wells Fargo Bank and other major banks approximately $2.7 million. Yi and Amorello operated a “bust-out” scheme by manipulating business and home equity lines of credit extended by the banks. Yi and Amorello accessed the lines of credit, which had been obtained by others, and then paid down the balances with worthless, insufficient-funds checks. After paying down the balances, the defendants quickly drew cash from the line of credit accounts before the payment checks bounced. When the checks bounced, the balances on the lines of credit shot up over the maximum limits, resulting in losses to the banks.
Yi and Amorello drove from New Jersey to California to perpetrate the fraud. In April 2000, Yi obtained a Social Security number in a false identity – “Koung Hee Kim” – by providing a false Korean passport and a false U.S. immigration document to a Social Security Administration office in Oxnard. Over the next two years, Yi and Amorello obtained false driver’s licenses from California and Arizona, using three false identities.
Yi and Amorello solicited Korean and Korean-American credit-holders by placing advertisements in local Korean-language newspapers. The ads claimed that Yi and Amorello could help people with a large amount of debt. In some cases, Yi and Amorello promised higher credit lines and then demanded fees from credit-holders. In other cases, Yi and Amorello obtained blank checks from people and used those checks to make payments on lines of credit held by others.
Yi and Amorello took most of the proceeds of the bust-out scheme and laundered them through bank accounts they had opened under the three false identities at numerous banks in Los Angeles and on the East Coast. In order to avoid detection, Yi and Amorello deposited the cash into these bank accounts in amounts less than $10,000. Ultimately, Yi and Amorello returned to their home state of New Jersey and bought two luxury homes with the cash. The total purchase price of both homes was almost $2 million, and Yi and Amorello put down more than $1.2 million of the fraud proceeds towards the homes.
Yi and Amorello were arrested in New Jersey on April 11, 2003, and they have been in custody ever since. They are scheduled to be sentenced by United States District Judge Christina A. Snyder on November 14. At sentencing, both defendants face maximum sentences of hundreds of years in prison.
The investigation in this case was conducted by the United States Secret Service and United States Postal Inspection Service.