Federal agents cuffed two Queens men on Thursday for allegedly stealing thousands of dollars from Korean-American investors in a foreign trading scam, prosecutors announced.
Tae Hung Kang (also known as Kevin Kang), 55, of Bayside and John Won, 49, of Flushing, were charged with conspiring to commit wire and securities fraud, securities fraud, and conspiring to commit money laundering, in connection with schemes involving foreign exchange trading that targeted members of the Korean-American community. Kang was also charged with substantive wire fraud.
If convicted, they each face 20 years in federal prison.
“As alleged in the indictment, Kang and Won lured Korean-American investors with false promises of great profits to be made in the foreign exchange market, and then stole their money,” stated United States Attorney Richard P. Donoghue. “This Office, together with our law enforcement partners, is committed to investigating and prosecuting fraudsters who prey upon the investing public.”
In one scheme, according to court documents, Kang and won allegedly defrauded dozens of investors through foreign exchange trading, which is essentially trading one currency for another in an effort to profit from fluctuating exchange rates.
Prosecutors said that investors were allegedly enticed through advertisements that the suspects placed in Korean-language newspapers which encouraged customers to open foreign exchange trading accounts at FOREXNPOWER, a company Kang, Won and others managed.
Kang and Won allegedly promised double-digit returns to investors, claiming to have a secret algorithmic trading method that would generate large profits with minimal risk. However, the defendants had minimal trading experience and their method had not been performed, causing the investors to suffer huge losses.
In their second scheme, prosecutors said, Kang and Won persuaded investors to buy into stock issued by Safety Capital Management, Inc. (“Safety Capital”), which did business as FOREXNPOWER. After telling the investors their investments would be pooled by Kang and others to conduct foreign exchange trading, or to expand the FOREXNPOWER business, they once again promised a large return on their investment.
Ultimately, almost all of the money that was invested in Safety Capital stock, which had a total of at least $700,000, was misappropriated by the defendants, who used the stolen money to pay for advertisements targeting investors and promoting FOREXNPOWER.