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Thom Mrozek (213) 894-6947 |
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Release No. 07-113
September 17, 2007
PRINCIPAL AT C+ CAPITAL MANAGEMENT SENTENCED TO OVER SEVEN YEARS FOR ORCHESTRATING $28 MILLION SCAM
The owner and operator of the now-defunct downtown investment advisor firm C+ Capital Management, LLC was sentenced late this afternoon to 87 months in federal prison for bilking primarily Korean-American investors out of more than $28 million.
Won Charlie Yi, 47, of Los Angeles, was sentenced by United States District Judge A. Howard Matz, who also ordered Yi to pay $28.8 million in restitution to individual investors and $2.4 million to Wells Fargo Bank.
In December 2005, Yi pleaded guilty to four counts of bank fraud, 11 counts of mail fraud, two counts of investment advisor fraud and two counts of criminal forfeiture. Those charges relate to an investment scheme he operated through C+ Capital Management, which raised well in excess of $20 million by inducing members of the Korean-American community to invest funds with a promise of large returns. The investors were told that their money would be invested in accounts at a New York-based broker-dealer, Carlin Equities Corporation, which Yi and his associates said had a branch in Los Angeles. Yi and his associates told victims that their money would be invested in publicly-traded companies and Regulation S offerings. Investors were provided with fabricated monthly account statements showing gains in their accounts, and the victims could view the false account statements on an elaborate Internet site.
After it became clear in 2003 that investors were going to have difficulty withdrawing their funds from their investment accounts, Yi created a fictitious letter from the Internal Revenue Service, which suggested that funds placed through C+ Capital accounts were subject to an audit freeze while the IRS investigated possible violations of the law under the USA Patriot Act.
When he pleaded guilty, Yi admitted that the accounts were never opened at Carlin Equities. Instead, the investors’ funds typically were deposited into bank accounts at Wells Fargo Bank controlled by Yi or his associates at C+ Capital. When investors sought to withdraw their investments, Yi and others at C+ Capital lulled the investors by giving them various reasons why their holdings could not or should not be immediately liquidated. Ultimately, they fled to Seoul. Before fleeing, Yi and an associate overdrew the Wells Fargo accounts by more than $2 million, which he caused to be wired to South Korean banks.
Yi was arrested in South Korea in April 2005 and was brought to the United States to face the charges in this case.
This case is the product of an investigation by the Federal Bureau of Investigation.
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Release No. 07-113
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