A Bayside man pleaded guilty in federal court Tuesday to securities fraud after he scammed Korean Americans in New York City who invested in his company, prosecutors announced on March 30.
In addition to pleading guilty, Tae Hung Kang, 57, agreed to pay over $835,000 to his alleged victims, after federal prosecutors claimed Kang misappropriated funds invested into his company, Safety Capital Management Inc.
“With today’s plea, Kang is held accountable for his fraud and for betraying the trust of the Korean American community who, believing in Kang’s integrity, invested hundreds of thousands of dollars in his company’s stock,” said Acting U.S. Attorney Lesko.
Kang told his investors that he’d use their money to conduct foreign exchange trading, taking advantage of the fluctuation of currencies around the world, feds said. He additionally told investors that he had access to an algorithm that he’d use to makes trades on the market, when in reality, no algorithm existed.
Federal prosecutors also said that Kang used the investors money to buy advertisements, which touted the fake algorithm, and were used to rope in more investors.
John Won, Kang’s co-defendant is awaiting trial.
If convicted, Kang faces up to five years in prison, forfeiture and a fine, according to the feds.