A Whitestone man was convicted by a federal jury in Brooklyn of securities and wire fraud conspiracies that targeted the Korean American community in Queens, according to the U.S. Attorney’s Office for the Eastern District of New York.
John Won, 53, the president of GNS Capital, was found guilty Tuesday on all five counts of an indictment charging him with securities fraud, wire fraud and money laundering conspiracies, as well as substantive securities fraud, federal prosecutors said.
Won was convicted following a weeklong trial before U.S. District Judge Raymond J. Dearle in Brooklyn federal court.
Won faces a maximum of 20 years in prison.
As proven at trial, between February 2012 and December 2013, Won conspired with co-defendant Tae Hung Kang, 57, of Bayside, and others in a scheme to defraud Korean American victims into investing in foreign exchange trading accounts and in their company known as ForexPower.
The conspirators issued advertisements in Korean-language newspapers and on Korean-language radio stations claiming the ForexPower had a secret algorithmic trading method used to trade in the foreign exchange market that guaranteed investors 10% monthly returns at no risk of loss.
In reality, ForexPower had no successful trading method and all of their customer accounts suffered substantial losses.
The conspirators also induced investors to purchase stock issued by ForexPower by falsely claiming that the invested funds would be used to expand the business to a new location in New Jersey or pooled and used to trade foreign currencies. In truth, Won and his co-conspirators misappropriated a substantial portion of the funds, spending the remainder on, among other things, the fraudulent advertisements.
“John Won and his co-conspirators targeted the Korean American community in our district and cheated them out of hundreds of thousands on the hard-earned dollars through a web of false promises, lies and deceit,” U.S. Attorney Breon Peace said. “Today’s verdict demonstrates the resolve of this office and our law enforcement partners to prosecuting those who engage in fraud and betray the trust of their investors.”
Co-defendant Kang, also known as “Kevin Kang,” pleaded guilty to scamming his clients in March to conspiracy to commit securities fraud. Kang is awaiting sentencing.