AP NEWS
Related topics

15 years for Washington man who stole $12.7M from investors

October 12, 2018

FILE - In this Feb. 10, 2006 file photo, Sung "Lawrence" Hong looks up as he starts to get into one of his three luxury cars at his waterfront home in Kirkland, Wash. Hong, who served nearly three years in prison for defrauding his neighbor out of about $800,000, was sentenced Wednesday, Oct. 11, 2018, to 15 years for tricking investors out of $12.7 million--a scam he and his wife began running shortly after he was released from the earlier prison term. (AP Photo/Elaine Thompson, File)

SEATTLE (AP) — A Washington state man who served nearly three years in federal prison for an $800,000 fraud — only to steal $12.7 million in a different scam after his release — has now been sentenced to a much longer term of 15 years.

The U.S. Attorney’s Office in Seattle says that from shortly after his release in 2010 until last year, Sung “Lawrence” Hong and his wife, Hyun Joo “Grace” Hong, defrauded 57 clients who thought the Hongs were legitimate investment advisers. Both were sentenced Wednesday; Grace Hong, 42, received six years.

The couple lost some of the money trading, but they used some the rest on personal expenses, including lavish trips; $12,000 per month to rent a 9,000-square-foot (830-square-meter) mansion in Clyde Hill, east of Seattle; a 45-foot (14-meter) yacht; and luxury vehicles including a Maserati and a Lamborghini.

Federal prosecutors said the Hongs preyed upon members of religious institutions; they named their investment company “Pishon” after a river in the Bible’s Book of Genesis. Among the evidence was a YouTube video of the Hongs speaking to a religious conference in Lancaster, California, in 2016.

In it, Grace Hong claims — falsely, prosecutors said — to have worked at Deutsche Bank before she and her husband decided to use their talents to help Christians.

“The desires in my heart was always saying, ‘How can I glorify His kingdom?’” she says in the recording. “I thought, ‘The right Christian way is make money and give back to His church.’”

One California church invested $1 million with the Hongs and lost about $300,000 on a single trade. Another couple allowed the Hongs to manage their $180,000 in retirement funds only to lose $100,000 within less than a year. The losses for some victims represented their entire life savings.

Sung Hong, 47, was arrested by federal agents for investment fraud in 2007 after an Associated Press story detailed how he had cheated his neighbor in Kirkland out of $800,000. When he was sentenced to 33 months for that crime, he told the judge: “Your Honor, once I get back into society, not only will I try my best, even if it means getting menial jobs ... I’ll try my best to pay back my debt.”

He added: “You’ll never see me here again, because I learned my lesson being incarcerated.”

“You clearly did not learn anything from the fact you were convicted and sentenced to prison,” Thomas Zilly, a different U.S. district judge, told him Wednesday, according to a news release from the U.S. Attorney’s Office. “You are one of those con men who will never be able to stop conning people.”

Hong told Zilly in a letter Monday that he was “deeply ashamed of the suffering” he had inflicted and that he “wanted to create a company that will benefit a lot of people.” The letter didn’t explain why he and his wife stole so much from their investors.

In a sentencing memo, assistant U.S. attorneys Justin Arnold and Steven Masada wrote that the Hongs had obtained $20 million from clients. They were ordered to repay the $12.7 million.

AP RADIO
Update hourly