Two Members of Large-Scale Identity Theft Ring Plead Guilty

NEWARK, NJ—Two more members of a large-scale and sophisticated identity theft scheme pleaded guilty this week, U.S. Attorney Paul J. Fishman announced.

Jung-Bong Lee, 38, of Palisades Park, N.J., pleaded guilty today before U.S. Magistrate Judge Patty Shwartz in Newark federal court to an Information charging him with conspiracy to unlawfully produce identification documents and commit credit card fraud (Count One) and aggravated identity theft (Count Two).

Jung-Sook Ko, a/k/a “Grace Lim,” 48, of Ridgefield, N.J., pleaded guilty Tuesday before Judge Shwartz to an Information charging her with conspiracy to unlawfully produce identification documents and to commit credit card fraud (Count One) and aggravated identity theft (Count Two).

Lee and Ko were arrested on Sept. 16, 2010, in a coordinated law enforcement takedown of 53 individuals in connection with widespread, sophisticated identity theft and fraud, including 42 other individuals charged with participating in one large-scale criminal enterprise.

Lee is currently detained. Ko was released on $250,000 unsecured bond.

According to documents filed in this case and statements made in court:

Sang-Hyun Park, a/k/a “Jimmy,” is alleged to have been the leader of a criminal organization (the Park Criminal Enterprise) headquartered in Bergen County, N.J., that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud and tax fraud. As part of the scheme, the Park Criminal Enterprise obtained Social Security cards with the prefix 586. Social Security cards with that prefix were issued by the United States to individuals, usually from China, who were employed in American territories, such as American Samoa, Guam, and Saipan. The Park Criminal Enterprise sold these Social Security cards to its customers and then escorted the customers to various states to use the cards to obtain identification cards and driver’s licenses.

The Park Criminal Enterprise then engaged in the fraudulent “build up” of credit scores associated with these fraudulently obtained identities. They did so by adding the identity as an authorized user to the credit card accounts of various co-conspirators who received a fee for this service—members of the enterprise’s credit build up teams. By attaching the identities to these existing credit card accounts, the teams increased the credit scores associated with the identities to between 700 and 800. The members of the build-up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.

After building the credit scores associated with these identities, Park and his co-conspirators directed, coached, and assisted other co-conspirators to open bank accounts and obtain credit cards and then used these accounts and credit cards to commit fraud. In particular, Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card related to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee.”

Lee and Ko were both customers of the Park Criminal Enterprise. Lee admitted that he obtained Social Security cards bearing the 586 prefix from the Park Criminal Enterprise and used them and other fraudulent documents to obtain an identification card in Illinois and a driver’s license in Pennsylvania. Lee and his co-conspirators used these fraudulently obtained identity documents to obtain credit cards and open bank accounts. Lee and his co-conspirators used these fraudulently obtained credit cards to obtain hundreds of thousands of dollars in cash and merchandise, including a Cartier watch, costing $11,122, and Gucci shoes, costing $835.

Ko admitted that she obtained a 586 Social Security card from the Park Criminal Enterprise and used it and other fraudulent documents to obtain an identification card and driver’s license in Illinois. Ko and her co-conspirators used these fraudulently obtained identity documents to obtain credit cards and open bank accounts. Ko admitted that around February 2010, in Bergen County and elsewhere, she and her co-conspirators fraudulently obtained credit cards from Macy’s, Bloomingdale’s, Saks Fifth Avenue, Nordstrom, Citibank, Chase, Bank of America, and HSBC, among others. Ko and her co-conspirators used these fraudulently obtained credit cards to obtain hundreds of thousands of dollars in cash and merchandise.

At sentencing, Lee and Ko faces a maximum potential penalty of five years in prison on Count One and a two-year mandatory minimum term in prison on Count Two. Sentencing for Ko is scheduled for Feb. 21, 2012, and sentencing for Lee is scheduled for Feb. 27, 2011.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; IRS—Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff; and the Department of Homeland Security’s Immigration and Customs Enforcement Homeland Security Investigations, under the direction of Acting Special Agent in Charge Andrew M. McLees. He also thanked the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives Steven Cucciniello for their work leading to today’s pleas.

The government is represented by Assistant U.S. Attorneys Barbara R. Llanes of the U.S. Attorney’s Office General Crimes Unit and Anthony Moscato of the Office’s Organized Crime/Gangs Unit in Newark.