SAN JOSE – A 58-year-old San Jose man has been sentenced to nearly three years in federal prison for two schemes, one of which saw him defraud investors of $4.7 million, according to authorities.
Joon Woo Kim pleaded guilty in March to committing wire fraud and making false statements to a bank to obtain a loan, the U.S. Attorney’s Office said in a news release.
The first scheme took place between June 2015 and March 2022. Kim, according to authorities, created and ran an investment fund called the M5 Doctors Fund with the “intent to deceive investors.”
Kim indicated he would invest only in publicly traded securities, but he instead transferred millions of dollars to CKR Enterprise Inc., a private wholesale food distribution company controlled by Kim and his wife, the U.S. Attorney’s Office said.
In the second scheme, Kim defrauded Hanmi Bank by applying for two loans for CKR – a $1.3 million line of credit and a $3.2 million business loan. The applications “contained materially false and fraudulent representations,” according to authorities.
The U.S. Attorney’s Office said Kim used his Ivy League degrees and investment experience to gain the trust of his investors. Many of the M5 Doctors Fund backers were nonprofit institutions that could only invest in public securities and would not have invested with Kim if they knew he was transferring their money to CKR.
In June 2023, a grand jury charged Kim with multiple counts of wire fraud, bank fraud and making a false statement to a bank. In his plea agreement, he pleaded guilty to one count of wire fraud and one count of making a false statement to a bank.
U.S. District Judge James Donato sentenced Kim to 33 months in prison and a three-year period of supervision, a condition of which requires him to make three 30-minute presentations to MBA classes about the “consequences of engaging in fraudulent practices and behaviors,” according to authorities. He must also pay more than $4.7 million in restitution.
Kim is scheduled to begin serving his prison term on Sept. 3.
Originally Published:
Source: www.mercurynews.com