Four People Plead Guilty in Connection with Large-Scale Identity Theft Ring

NEWARK, NJ—Four people who took part in a sophisticated, large-scale identity theft ring have pleaded guilty to a variety of charges in connection with the scheme, U.S. Attorney Paul J. Fishman announced today.

Hyo-Il Song, a/k/a “Daniel,” 49, of Fort Lee, N.J., pleaded guilty today before U.S. Magistrate Judge Patty Shwartz to a three-count information that charged him with unlawfully producing identification documents, aggravated identity theft, and conspiracy to commit wire fraud. On the conspiracy count, he faces a maximum potential prison term of 20 years and up to a $250,000 fine. Song is currently detained while awaiting sentencing, scheduled for May 23, 2012.

Three other defendants in the case pleaded guilty earlier this week:

• Son-Hee Chong, 56, of Palisades Park, N.J., pleaded guilty on Feb. 8, 2012, before Judge Shwartz to conspiracy to unlawfully produce false identification documents and to commit credit card fraud. She faces a maximum potential penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or victim loss from the offense. Sentencing is scheduled for May 22, 2012. She was released on $250,000 bail.
• Myung-Kyun Ko, 51, of Leonia, N.J., pleaded guilty on Feb. 8, 2012, before Judge Shwartz to conspiracy to unlawfully produce an identification document and to commit credit card fraud. He faces a maximum potential penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or victim loss from the offense. Sentencing is scheduled for May 22, 2012. He was released on $250,000 bail.
• Alex S. Lee, 44, of Palisades Park, pleaded guilty on Feb. 6, 2012, before U.S. District Judge Katharine S. Hayden to an information charging him with conspiracy to unlawfully produce an identification document and false identification document and commit credit card fraud (count one) and aggravated identity theft (count two). He faces a maximum potential penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or victim loss from the offense, on count one, and a mandatory minimum of two years in prison on count two. Sentencing is scheduled for May 21, 2012. He was released on $250,000 bail.

Song, Lee, Chong, and Ko were arrested on September 16, 2010, in a coordinated law enforcement takedown of 53 individuals in connection with widespread, sophisticated identity theft and fraud, including 40 other individuals charged along with Song, Lee, Chong, and Ko with participating in one large-scale criminal enterprise.

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

Song, Lee, Chong, and Ko conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to obtain Social Security cards beginning 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. Park is alleged to have been the leader of a criminal organization 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, tax fraud, and other crimes. Park pleaded guilty on Jan. 9, 2012, to charges related to his role in the enterprise and is awaiting sentencing.

The Park Criminal Enterprise engaged in the fraudulent “build up” of credit scores associated with the Chinese identities. They did so by adding the Chinese 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 Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese 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 associated with these identities, Park and his co-conspirators directed, coached, and assisted his customers to open bank accounts and obtain credit cards. Park and his co-conspirators 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.”

Song

Between July 2007 and March 2009, Song traveled to various states, including Illinois, Tennessee, and Pennsylvania and, using four different Social Security cards beginning with 586, obtained driver’s licenses and identification cards in the names of individuals with the initials Y.H.W., H.P., M.L., and D.Z. Song used these fraudulently obtained identities to apply for and receive credit cards and open bank accounts. Song acted as a collusive merchant for the Park Criminal Enterprise. He used the H.P. identity to establish a merchant bank account at a financial institution in the name of 153 Samsung DC, Inc., and he used the M.L. identity to establish a merchant bank account at a financial institution in the name of 90 You and Me. Both companies were fictitious and neither sold goods nor provided services. After fraudulently establishing these merchant accounts, Song obtained credit card machines and, together with Sang-Hyun Park and other co-conspirators, charged fraudulently obtained credit cards through the machines. After the funds from these fraudulent transactions were wired into Song’s merchant accounts for 153 Samsung DC and 90 You and Me, he withdrew the cash and shared it with his co-conspirators. Song caused in excess of $1 million in losses to banks, credit card companies, and others.

Lee

Beginning in mid-2008, Lee obtained two Social Security cards beginning with 586 in the names of names of individuals with the initials Y.H. and Y.Z. from the Park Criminal Enterprise. On Sept. 4, 2008, Lee traveled to Pennsylvania and used the Y.H. identity to fraudulently obtain a driver’s license. In January 2010, Lee obtained a counterfeit driver’s license from the Park Criminal Enterprise. Lee used these fraudulently obtained and counterfeit identity documents to obtain credit cards for the purpose of committing fraud. On Feb. 27, 2010, Lee entered a retail store in Bergen County, N.J., and fraudulently obtained a line of credit account with that store using the Y.Z. identity documents, including the counterfeit driver’s license. After opening this line of credit, Lee purchased approximately $2,875.50 in merchandise from the store, including a Louis Vuitton bag ($1,410), Louis Vuitton belt ($575), and a Louis Vuitton wallet ($740). Lee left the store, placed the merchandise in his car, and returned to the store. After returning to the store, Lee attempted to use the Y.H. identity to open a second line of credit. Lee and his co- conspirators caused in excess of $120,000 in losses to banks, credit card companies, and others.

Chong

In September 2009, Chong and another co-conspirator, In-Suk Joo, who has previously pleaded guilty, each obtained a fraudulent Social Security card and corresponding counterfeit driver’s licenses from the Park Criminal Enterprise. Chong paid approximately $14,000 to Sang- Hyun Park for the two Social Security cards and counterfeit driver’s licenses. Chong and Joo used their fraudulently obtained identities to obtain credit cards. Chong, Joo, and their co- conspirators caused in excess of $30,000 in losses to banks, credit card companies, and others.

Ko

In April 2008, Ko obtained a fraudulent Social Security card in the name of an individual with the initials L.C. On April 21, 2008, Ko traveled from Bergen County to Illinois and obtained an identification card in that name and then used that identity to fraudulently obtain credit cards. Ko and his co-conspirators caused in excess of $120,000 in losses to banks, credit card companies, and others.

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 Acting Special Agent in Charge JoAnn Zuniga; the Department of Homeland Security’s Immigration and Customs Enforcement Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; and 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 the guilty pleas.

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

As for other members of the Park Criminal Enterprise, the charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Defense Counsel
Song: Peter R. Willis and Charles Alvarez Esqs., Jersey City, N.J.
Lee: Joshua Lim Esq., Palisades Park
Chong: Michael A. Baldassare Esq., Newark
Ko: Elisabeth H. Smith Esq., Mendham, N.J.