On Monday the leader of a large scale identity theft fraud ring and a co-conspirator plead guilty and admitted roles in a fraud enterprise.
Sang-Hyun (“Jimmy”) Park pleaded guilty to a five-count Information that charged him with conspiracy to unlawfully produce identification documents, conspiracy to commit wire and bank fraud, aggravated identity theft, money laundering and conspiracy to defraud the IRS.
Park has now admitted to directing a large scale and sophisticated identity theft and financial crimes that have led to charges against 54 individuals.
Co-conspirator, Ho (“Edmund”) Yu, fraudulently established credit scores for the enterprise’s customers and fraudulently obtained hundreds of thousands of dollars in commercial loans for others. Yu also pleaded guilty today to a three-count Information charging him with conspiracy to commit wire fraud affecting financial institutions.
According to documents files in court, Park was the leader of a criminal organization (the “Park Criminal Enterprise”) 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 and tax fraud. As part of the scheme, the Park Criminal Enterprise obtained 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. The Park Criminal Enterprise sold the cards to its customers and then escorted the customers to various states to use them 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 these identities as authorized users 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 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 elated to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee.”
Among other things, Park admitted that he operated the criminal enterprise out of several offices in Bergen County, N.J., ran advertisements in local newspapers to attract customers interested in his illegal services, met with customers and other co-conspirators and otherwise directed the activities of the criminal enterprise.
He also admitted that he obtained and sold 586 social security cards to his customers and members of his criminal enterprise escorted more than 100 customers to various states so they could fraudulently obtain identification cards and driver’s licenses using the 586 social security cards and other fraudulent documents – such as counterfeit Chinese passports.
Park also admitted he conspired with and paid cash to various “build up teams,” which included Yu, to build the credit scores and establish credit histories for the fraudulent identities that he had sold to his customers. Park also told Judge Shwartz he laundered portions of the money he obtained through the fraud by wiring the money to various accounts in South Korea.
In total, Park defrauded various credit card companies, banks, and lenders out of approximately $4 million. He and his co-conspirators also claimed more than $182,000 in tax refunds from the Internal Revenue Service through the filing of false and fictitious tax returns and accompanying documents.
At sentencing, Park faces a maximum potential penalty of 15 years in prison and a $250,000 fine on Count One; 30 years in prison and a $1 million fine on Count Two; a two-year mandatory minimum term in prison on Count Three; 20 years in prison and a $500,000 fine on Count Four; and five years in prison and a $250,000 fine on Count Five. Sentencing for Park is currently scheduled for April 23, 2012. He is currently detained.
“Today, ‘Jimmy’ Park admitted he ran an organization which obtained social security numbers through fraud, manufactured fake IDs, ripped off banks and retailers and laundered a portion of millions in profits overseas,” said U.S. Attorney Fishman. “This criminal enterprise combined traditional identity theft with sophisticated credit card fraud, and dismantling it is a signal success in combating the emerging problem of international organized crime.”
Yu admitted his role in three separate conspiracies, including that from 2001 through 2002, he conspired with others to fraudulently obtain hundreds of thousands of dollars in small business loans for unqualified borrowers. To obtain these commercial loans, Yu and his co-conspirators submitted false loan applications and supporting documents to a lender. The vast majority of these loans defaulted, resulting in significant losses to the lender.
Yu also admitted that between 2006 and January 2009, he conspired with others to obtain hundreds of thousands of dollars in personal business loans for unqualified borrowers. In furtherance of this conspiracy, Yu and a co-conspirator manufactured false tax returns and W-2 forms and submitted them with bogus loans applications to lenders. The vast majority of these loans defaulted, resulting in significant losses to the lenders.
Finally, Yu admitted that he conspired with Park and others by fraudulently building credit scores for Park’s customers who were using 586 identities. Yu acknowledged that he received approximately $500 in cash for each identity he added to his accounts. In total, Yu and his co-conspirators caused in excess of $2.5 million in losses to banks, credit card companies, and other lenders.
At sentencing, Yu faces a maximum potential 30 years in prison and a $1 million fine on each of the three counts to which he pleaded guilty. Sentencing for Yu is currently scheduled for April 23, 2012 – Source.
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