LAWFUEL – The Legal Newswire – R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Don B. Saxon, Commissioner, State of Florida Department of Financial Regulation, announced that defendant Yung Bae Kim, pled guilty today to two felonies before United States Magistrate Judge James M. Hopkins in West Palm Beach. Kim pled guilty to one count of conspiracy to commit mail and wire fraud, and one count of wire fraud. He faces a maximum period of twenty-five (25) years in prison, five years of supervised release, a fine of $500,000 and restitution to victims of the fraud.
Kim admitted that he participated in a massive investment fraud involving various hedge funds under the umbrella of the KL Group, LLC, initially in California and later in Palm Beach County. Nearly $195 million was taken in from investors between 2000 and 2005.
In early 2005, the Securities and Exchange Commission began legal action to shut down KL’s operations. U.S. District Court Judge Kenneth L. Ryskamp appointed a receiver to oversee the assets of KL shortly thereafter. During the plea, Yung Kim admitted that he and others at KL, including John Kim and Won Lee, touted to investors through quarterly mailings and website postings that the KL Financial Group was a successful family of hedge funds. In fact, however, the funds lost millions of dollars, and paid old investors with new investors’ funds through a pyramid scheme. Yung Kim further admitted that he and others at KL used counterfeit documents that falsely reported investment returns in order to fool lawyers, accountants and ultimately their victims, the investors.
Yung Kim has remained in federal custody since being apprehended returning to the United States on an incoming flight from Japan. The Court scheduled sentencing for November 2, 2007 at 1:30 p.m. before District Court Judge Kenneth L. Ryskamp.
U.S. Attorney Acosta stated, “Today’s guilty plea confirms the federal government’s and the State of Florida’s continued commitment to investigate and prosecute individuals who have misused computers and the internet to defraud the investing public. This case is another example of the successes that occur when law enforcement agencies combine resources to combat fraud and money laundering in our community.”
Mr. Acosta commended the detailed investigative efforts of the Federal Bureau of Investigation, Florida Department of Financial Regulation, and the West Palm Beach office of the United States Attorney. The case is being handled by Assistant United States Attorneys Stephen Carlton and Andrew Lourie.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls . Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.