Bergen County Man Admits His Role in Large-Scale Identity Theft Ring and Tax Evasion

NEWARK—A Bergen County man today admitted his role in a large-scale and sophisticated identity theft scheme, U.S. Attorney Paul J. Fishman announced.

Sang-Kyu Seo, 63, of Palisades Park, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden to a five-count information that charged him with conspiracy to unlawfully produce identification documents and false identification documents (count one), aggravated identity theft (count two), conspiracy to commit wire fraud (count three), conspiracy to commit bank fraud (count four), and tax evasion (count five). He was arrested on September 16, 2010, and released on $250,000 bail.

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

Seo was the owner and operator of Hang Jin Yi Inc., d/b/a Hwangini, a salon located in North Bergen, New Jersey, and Pier 7 Corporation, a purported small business located in Palisades Park. Seo conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to obtain a Social Security card beginning with the prefix “586” for another individual. These 586 Social Security card were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County, New Jersey, 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 January 9, 2012, 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 up the credit associated with these identities, Park and his co-conspirators directed, coached, and assisted the customers in opening bank accounts and obtaining 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 cards related to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their kkang fee.

Seo admitted that he obtained a 586 Social Security card and counterfeit driver’s licenses through Park for a family member, who then used this identity to “bust out” credit cards.

Seo also admitted that he gave his corporate and personal credit cards to Park for the purpose of “busting out” these maxed out credit cards. In furtherance of this conspiracy, Park and his co-conspirators issued worthless checks, drawn on bank accounts that had been established using the 586 identities, as payment toward the balances on Seo’s credit cards. Before the banks and credit card companies realized that these checks were bogus, Park and his co-conspirators charged Seo’s credit cards through collusive merchants or used them to purchase merchandise. On October 3, 2009, Park and Seo spoke over the phone concerning this scheme. During this intercepted call, the following conversation ensued:

• Park: You know it. If you don’t pay for the debt, the score becomes bad.
• Seo: That’s right. Anyhow, it was already dropped.

* * *

• Park: And then, you don’t have to worry about if someone will come from a bank.
• Seo: Yes, yes. Anyway, later....I will declare Chapter 7 or Chapter 13 bankruptcy.

Seo also admitted that, in mid-2007, with the assistance of a loan broker, he fraudulently obtained a $100,000 commercial loan on behalf of Pier 7. Seo admitted that he and the loan broker made false statements to obtain the loan, including falsely representing this his business’ annual revenue was approximately $620,000.

Finally, Seo admitted that he committed tax evasion by issuing checks to himself and others, representing income derived through the operation of Hwangini and then failing to report this income on his personal tax returns. For example, Seo admitted that on or about April 15, 2008, he filed an individual income tax return for tax year 2007. This return declared that his taxable income for calendar year 2007 was approximately $197, and the amount of tax due and owing was approximately $19. Seo admitted that this return failed to include $304,848 in additional taxable income that he had received in 2007, thus having an additional tax of $81,643 due and owing to the United States.

Seo faces the following statutory maximums: 15 years in prison (count one); two years in prison, mandatory minimum (count two); 30 years in prison (counts three and four); and five years in prison (count five). Sentencing is scheduled for May 14, 2013.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge David Velazquez in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; the Department of Homeland Security’s Immigration and Customs Enforcement, 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 the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office 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.