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Fugitive Money Manager Is Arrested in Arizona

The Los Angeles man is accused of defrauding investors in Korean community of millions.

April 26, 2005|E. Scott Reckard | Times Staff Writer

Fugitive Los Angeles money manager Won Charlie Yi, accused of bilking millions of dollars from fellow Korean Americans, was in federal custody Monday after his car was stopped for speeding on an Arizona highway, authorities said.

Yi, a passenger in the silver BMW 745, was armed and carrying passports in other people's names at the time of his April 10 arrest, the U.S. attorney's office in Los Angeles said.

The car "was going 113 miles an hour in a 75 zone outside of Yuma," said Assistant U.S. Atty. James Aquilina, citing a report from Arizona authorities. "He apparently had a .45 [caliber handgun], 300 rounds of ammunition and two manuals on how to make homemade silencers."

Yi was being held by federal marshals in Arizona and couldn't be reached for comment. He was expected to be returned to Los Angeles this week. Aquilina said that as far as he knew, Yi had no attorney.

Court filings accused Yi last year of fraudulently raising at least $36 million from investors, mainly garment manufacturers and other small-business owners in Southern California, through his C+ Capital Management company in downtown Los Angeles.

According to an FBI affidavit and Securities and Exchange Commission filings, Yi told investors he could make bulk purchases of stock in Pacific Union Bank, which focused on Los Angeles' Korean community, at a discount from private sources.

The FBI said the scheme began unraveling after an announcement that Hanmi Financial Corp., a Los Angeles bank, would buy Pacific Union for $295 million. Pacific Union shares shot up in value. As Yi's clients clamored to cash out last May, he was nowhere to be found, authorities said.

Thom Mrozek, a spokesman for the U.S. attorney's office, said Monday that authorities believed Yi and a C+ Capital employee, Jong-Jin Lee, fled to Seoul.

Mrozek said his office filed a criminal complaint against both men last summer. The complaint was sealed, but prosecutors have asked the court to unseal it, which could happen this week, Mrozek said.

Evidence from airline passenger logs indicated that Yi, 35, had traveled from Seoul to Hanoi, Hong Kong and then Vancouver in late March before returning to the U.S., Aquilina said.

Aquilina said Yi is believed to have arrived in Los Angeles early this month, where he called a former associate at C+ Capital and persuaded him to drive the two of them to an Arizona gun show in the borrowed BMW. They were stopped while returning from that show, he added.

A day after his arrest, Yi was turned over to federal authorities, and at an April 12 hearing he was ordered held without bond, Mrozek said. He agreed to return to Los Angeles to face the criminal charges.

On Friday, a grand jury in Los Angeles issued an 18-count indictment alleging that Yi and Lee defrauded Wells Fargo Bank out of $2.5 million by depositing bad checks before they fled, and then withdrawing the money overseas.

Before his disappearance, investors said that Yi had appeared to be living a classic American success story, driving luxury cars, including a bulletproofed BMW, chartering jets for gambling sprees in Las Vegas and hiring major investors' children to work at C+ Capital, headquartered in 14,000 square feet on the 36th floor of Sanwa Bank Plaza.

But according to private and government lawsuits, Yi fleeced investors out of at least $36 million. The SEC charged him and C+ Capital last year with civil violations of securities laws.

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