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Money manager indicted on laundering charges

December 21, 2006|From the Associated Press

The president of a money management firm faces a federal indictment on charges of money laundering and mail and wire fraud in connection with an investment scheme that duped investors out of $4 million, authorities said Wednesday.

Kangsan Kim had been previously indicted on 10 counts of mail fraud and five counts of wire fraud, but a federal grand jury in Los Angeles returned a superseding indictment on Wednesday adding 11 counts of money laundering, the Internal Revenue Service said.

Kim is the president of money manager Unus Capital Management Inc. and chief financial officer of brokerage firm PeopleN Investment Corp.

He and others allegedly bilked investors by pretending to set up accounts with Unus for securities trading, the IRS said.

PeopleN was supposed to execute the trades for Unus, but the firm placed few, if any, orders on behalf of investors, the IRS said.

Instead, Kim and others spent their investors' money on office and personal expenses, including payments on Kim's two cars and his home in Anaheim, the IRS said.

The scheme used ads on Korean-language radio stations in Los Angeles to target investors from Southern California's Korean community, the IRS said.

Kim could not be reached for comment.

Kim, who initially lured investors by promising gains of 10% to 15% on their money, used funds from newer investors to pay off earlier investors, the IRS said.

To keep investors in the dark, Kim mailed fake account statements and wired other false information to investors from the PeopleN website, the agency said.

Kim faces a maximum federal prison term of 520 years, or 20 years per count, and as much as $5.5 million in fines if he is convicted on all counts.

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