Two Men Sentenced to Prison for Roles in Large-Scale Identity Theft Ring and Tax Evasion
|U.S. Attorney’s Office September 17, 2013|
NEWARK, NJ—Two men were sentenced to prison terms today for their respective roles 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, was sentenced to three years in prison, and Young-Woo Ji, 39, Bayside, New York, was sentenced to 65 months in prison by U.S. District Judge Katharine S. Hayden in Newark federal court.
Seo previously pleaded guilty before Judge Hayden to a five-count information that charged him with conspiracy to unlawfully produce identification documents and false identification documents, aggravated identity theft, conspiracy to commit wire fraud, conspiracy to commit bank fraud, and tax evasion.
Ji previously pleaded guilty before Judge Hayden to an information charging him with conspiracy to commit wire fraud affecting financial institutions and bank fraud, aggravated identity theft, and false claims.
According to documents filed in this case and statements made in court:
The Seo Conspiracy
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 cards 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 coconspirators 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 conspirators directed, coached, and assisted the customers in opening bank accounts and obtaining credit cards. Park and his 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 coconspirators, 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 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 conspirators charged Seo’s credit cards through collusive merchants or used them to purchase merchandise.
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 that his business’ annual revenue was approximately $620,000.
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. 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, having an additional tax of $81,643. He was arrested on September 16, 2010, and released on $250,000 bail.
The Ji Conspiracy
Ji conspired with Park and others to defraud banks, credit card companies, and other lenders. Ji admitted that in February 2008, he traveled to Illinois and used a 586 Social Security card belonging to a person with the initials F.C. to fraudulently obtain driver’s licenses.
Ji admitted that he used the F.C. identity to fraudulently obtain credit cards. He then used these credit cards, in the name of F.C., to fraudulently build up credit scores and credit histories for Park’s customers who had obtained 586 identities from the Park Criminal Enterprise.
Ji also admitted that he used the F.C. identity to establish a merchant account for ZZ Entertainment Inc., a completely fictitious business. By establishing this account, Ji obtained a credit card processing machine and thereafter served as a “collusive merchant” for the Park Criminal Enterprise. Ji acknowledged that between October 5, 2008 and October 20, 2008, he charged $50,000 in fraudulent credit card charges through his ZZ Entertainment Corp. account and then shared portions of this fraud with Park. In total, Ji caused more than $400,000 in financial losses to banks, credit card companies and others.
Ji admitted that he used the 586 identities that he had obtained from Park to file fraudulent tax returns with the IRS. Ji admitted that he used these identities, together with fraudulent W-2 Forms, to claim hundreds of thousands of dollars in tax refunds. He was arrested on September 16, 2010, and released on a $250,000 bail.
In addition to the prison term, Judge Hayden sentenced Seo to three years of supervised release and ordered him to pay $1.2 million in restitution. She sentenced Ji to three years of supervised release and ordered him to pay $187,874 in restitution.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; 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 sentence.
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.