Tuesday, June 9, 2009
And still another ponzi scheme -- this one operating out of California and directed at Korean-Americans:
The SEC charged two California men and two companies they control for conducting an $80 million Ponzi scheme that targeted Korean-American investors with false promises of extraordinarily high returns from foreign currency (forex) trading. The SEC alleges that Peter C. Son and Jin K. Chung lured approximately 500 investors in the United States, South Korea, and Taiwan into their investment scheme in which funds were not traded in the forex market as claimed, but instead used to pay cash "returns" to certain investors in Ponzi-like fashion. They also misappropriated investor money for their own personal use, including mortgage payments on Son's multi-million dollar home. The SEC is seeking an emergency court order to freeze the defendants' assets.
According to the SEC's complaint, filed in federal district court in San Francisco, Son and Chung operated their scheme through SNC Asset Management, Inc. (SNCA) and SNC Investments, Inc. (SNCI), which maintained offices in Pleasanton, Calif., and New York City. Son and Chung promised investors spectacular annual returns of up to 36 percent from forex trading, and told investors that SNCA had generated 50 percent profits from such trading each year since 2003. Among other relief, the SEC seeks court orders prohibiting the defendants from engaging in future violations of these provisions; freezing their assets and compelling them to return overseas assets to the U.S.; and requiring them to disgorge their ill-gotten gains and pay financial penalties.
Yesterday, Son appeared in federal court in Oakland, Calif., on federal criminal charges. Separately today, the Commodity Futures Trading Commission announced civil fraud charges against Son, Chung, SNCA, and SNCI.