Irvine Businessman Sentenced for Operating $8.5 Million Ponzi Scheme that Targeted Korean American Community
|U.S. Attorney’s Office September 19, 2011|
A man who operated a Ponzi scheme that targeted members of the Korean American community was sentenced Monday to 78 months in prison, announced André Birotte Jr., the United States Attorney for the Central District of California, and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
Euirang “Chris” Hwang, 38, received the sentence from United States District Judge James Selna. On December 7, 2010, Hwang pleaded guilty to federal wire fraud charges relative to his role in the investment scheme in which approximately $8.5 million was collected from 65 victims throughout California. In addition, Judge Selna ordered Hwang to pay $7,003,654.00 in restitution.
On March 9, 2010, Hwang, a naturalized United States citizen, and co-defendant, Sang Yi, were arrested by the FBI at a home in Corona. The couple was charged with four counts of wire fraud in an indictment returned in U.S. District Court in Santa Ana on February 3, 2010. Hwang was the founder and chairman of Irvine-based investment firm, Pinupito. Hwang and Yi have been incarcerated since their arrest.
Hwang and Yi promised investors annual returns of up to 45 percent with false representations that Pinupito generated income by buying and developing smaller companies in Korea, then selling them for a large profit. Investors were falsely told that Hwang was a billionaire and that his profitable company had extensive holdings in Korean businesses and real estate. The money collected from investors was not used to finance Pinupito’s operations, but rather was used to pay for, among other things, luxury car leases, personal expenses and returns to existing investors. The defendants marketed Pinupito to members of the Korean-American community, soliciting some investors during meetings held at Korean-language churches.
During the sentencing hearing, victims addressed the court to relate how the scheme has adversely affected their lives and financial situations.
Yi, a South Korean citizen, was the president and secretary of Pinupito, and exercised control over Pinupito’s finances and bank accounts. Yi pleaded guilty in January 2011 to federal wire fraud charges and is scheduled to be sentenced in 2011.
The case against Hwang and Yi is the result of an investigation by the Federal Bureau of Investigation, and is being prosecuted by the United States Attorney’s Office in the Central District of California.