Korean Americans Hit Hard by Ponzi Scheme


San Francisco—A Ponzi scheme which targeted Korean Americans by promising them up to 36% returns on foreign currency trading has landed a Danville, CA man in federal court.

Authorities say that Peter C. Son, who faces civil and criminal charges for defrauding investors of $80 million dollars, used the money to pay his mortgage on a lavish home. Also charged was Jin K. Chung of Los Altos. The civil suit charging the men was filed by the Securities and Exchange Commission in United States District Court.

The men used the funds they received from would-be investors to pay out cash “returns” to certain other investors in a “Ponzi-like fashion,” instead of trading the money, claimed the SEC. The scam allegedly lasted for five years from 2003 to 2006. They operated the scheme through SNC Asset Management Inc. of Pleasanton, CA and SNC Investments Inc. of New York.

Son and Chung fudged monthly statements in order to show “substantial trading returns,” said the SEC, after promising investors that they could see as much as 36% in annual returns by engaging in foreign currency trading. They also claimed that one of their companies had made 50% profits from this kind of trading for several years.

Chung emptied the bank accounts and transferred the funds to overseas accounts, after abandoning operation of the businesses without giving any notice to the investors.

Son is also accused of having misappropriated money for his personal use, not only paying the mortgage on his home, which is worth $2.6 million, but also paying country-club and homeowner’s-association dues.

A spokesperson for the SEC’s regional offices said that the two targeted the close-knit communities of Korean Americans. The victims lived in California and four other states, as well as in South Korea and Taiwan. Son and Chung allegedly placed advertisements in Korean-language newspapers to promote their scheme, as well as using agents to perpetrate “affinity fraud.”

Son has appeared in U.S. District Court on the charges, and is being held without bail in an Oakland jail.

The Commodity Futures Trading Commission has filed civil fraud charges in a separate action against both men and their companies.

Song and Chung are said to have defrauded a total of 500 investors of $80 million in the scheme.


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