Two years after his arrest, a Bayside fraudster pleaded guilty to tricking clients out of at least $700,000.
Tae Hung Kang, also known as Kevin Kang, pleaded guilty in Brooklyn federal court March 30 to using investor money from his company to pay for advertisements rather than in stock as his clients believed. He specifically targeted Korean Americans, the FBI said, by exploiting his affiliation with the community.
Kang’s co-conspirator, John Won, is awaiting trial.
“With today’s plea, Kang is held accountable for his fraud and for betraying the trust of the Korean-American community who, believing in Kang’s integrity, invested hundreds of thousands of dollars in his company’s stock,” acting U.S. Attorney Mark Lesko said in a statement.
According to officials, Kang and Won’s scheme was two-fold. They would place advertisements in Korean-language newspapers enticing investors to open foreign exchange trading accounts at their company FOREXNPOWER. Investors were promised double-digit returns and little risk because Kang and Won used a secret algorithmic trading method that generates large profits.
In truth, Kang and Won had virtually no trading experience and their algorithm did not exist. Investors suffered substantial losses.
In the second scheme, investors were persuaded by the defendants to invest their money into stock issued by Safety Capital Management, Inc., which did business as FOREXNPOWER. Clients were told their investments would be pooled by Kang and Won to conduct foreign exchange trading or to expand the FOREXNPOWER business.
The investors were promised large returns, but nearly all the $700,000, invested in Safety Capital stock was used to pay for more advertisements to trick more investors and promote FOREXNPOWER.
At the time of their arrest April 2018, Kang and Won each faced up to 20 years in prison. At sentencing, Kang faces up to five years. He has also agreed to pay $835,058.32 in restitution.