Husband and wife to pay over USD1m to settle futures trading scheme fraud charges

Discussion in 'Wall St. News' started by dealmaker, Feb 11, 2019.

  1. dealmaker

    dealmaker

    [​IMG]
    Husband and wife to pay over USD1m to settle futures trading scheme fraud charges
    Mon, 11/02/2019 - 10:27

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    Washington State residents Sung Hong a/k/a Lawrence Hong or Laurence Hong, his wife, Hyun Joo Hong a/k/a/ Grace Hong, and their company Pishon Holding, are to pay more than USD1.25 million in restitution in connection with an enforcement action brought by the CFTC charging the defendants with fraudulent solicitation and misappropriation involving futures contracts.

    In addition to the restitution, the Court Order also imposes a permanent trading and registration ban on the Hongs and Pishon and prohibits them from violating provisions of the Commodity Exchange Act (CEA) as charged.

    The Court’s Order stems from a CFTC Complaint filed on 1 June, 2017 in the US District Court for the Western District of Washington. In the Order, Judge Marsha Pechman found that the Hongs and Pishon misappropriated USD1,259,317.77 from their customers. Additionally, the court found that the Hongs and Pishon fraudulently solicited more than USD11 million dollars from customers for the purpose of trading futures contacts. The court further found that the Hongs and Pishon lied about, about among other things how much money they had under management; Laurence Hong’s prior trading success; and how trading fees would be deducted from customer accounts. At the same time, the Court Order found, the Hongs and Pishon failed to tell customers that Laurence Hong had been imprisoned previously for 33 months in connection with wire fraud charges.

    In a parallel criminal case filed in the United States District Court for the Western District of Washington, Laurence Hong and Grace Hong pleaded guilty on 27 March, 2018 and 30 March, 2018, respectively, to multiple criminal counts. See Case No. CR17-163TSZ. On 11 October 2018, Laurence Hong was sentenced to a 180-month prison term and Grace Hong was sentenced to a 72-month prison term. The court ordered that the defendants also pay restitution in the criminal matter. In recognition of the prior restitution award in the criminal matter, Judge Pechman ordered that the defendants may offset their civil restitution obligation with payments in the criminal matter on a one-to-one basis.

    The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

    The Division of Enforcement thanks the United States Attorney for the Western District of Washington and the FBI for their invaluable assistance and cooperation.

    The CFTC Division of Enforcement staff members responsible for this case are Kevin Samuel, Ilana Waxman, Kim Bruno, Alison Wilson, and Rick Glaser.

    https://www.hedgeweek.com/2019/02/1..._medium=email&utm_campaign=Hedgewire+11/02/19
     
    ironchef, traderob, JSOP and 2 others like this.
  2. Nobert

    Nobert

  3. destriero

    destriero

    On October 11, 2018, Laurence Hong was sentenced to a 180-month prison term and Grace Hong was sentenced to a 72-month prison term. The court ordered that the defendants also pay restitution in the criminal matter. In recognition of the prior restitution award in the criminal matter, Judge Pechman ordered that the defendants may offset their civil restitution obligation with payments in the criminal matter on a one-to-one basis.

    https://www.kiro7.com/news/local/fe...nvestment-cash-for-lavish-lifestyle/529151509
     
    ironchef likes this.
  4. bone

    bone ET Sponsor

    A church putting $1M into a futures trading enterprise seems like the most egregious act. :banghead:
     
    comagnum, destriero and dealmaker like this.
  5. destriero

    destriero

    In the video the clown says, "scam an individual... don't scam God!"

    Well, scamming individuals out of $11MM cost him 15 years. Wifey got 7 years. Good riddance.
     
  6. JSOP

    JSOP

    Thanks for always publishing the whole entire article instead of just a link so in case we get pay-walled, we can still read it. Much appreciate it!
     
  7. JSOP

    JSOP

    This is a site that has more of the photos of the couple and their lavish lifestyle. They have a mansion in an upscale neighbourhood, a yacht, three luxury cars, take expensive vacation around the world. https://www.tradingschools.org/reviews/day-trading-con-artists/

    They even have 3 children. I feel so sorry for the children. This site believes that they were pulling a ponzi scheme. I don't think so. I think they are just very bad traders or just don't trade at all and just collected lavish management fees from gullible investors that believed that they can really make whatever percentage of returns that the couple was selling.
     
  8. bone

    bone ET Sponsor

    While I share your empathy for the children I do not share your dismissive attitude towards the parents; if they were "just bad traders" or just "collecting lavish management fees" they wouldn't be going to Federal Prison for 15 and 7 year sentences. I read the CFTC Complaint and the Court's Ruling.

    The Court found that the "Hong" Defendants fraudulently solicited customers and defrauded them out of more than $11 million. There wasn't any trading going on to speak of. This was outright theft. If you would like to see what covering up bad trading losses with misrepresentations and inflated management fee pumping looks like, I would refer you to the Karen Bruton case. She didn't get sentenced to Federal Prison.
     
  9. ironchef

    ironchef

    They rented the mansion and I suspect the cars and yacht were leased. They could be hiding their money elsewhere.
     
  10. JSOP

    JSOP

    Well if they didn't trade at all then how did those investors lose several hundred K a day??!! "Of course, massive losses ensued. One person lost $100k in a single day. Another person lost $300k on a single trade.". Where did those claims come from if the Hongs just took the money and then spent it on themselves and their family and didn't trade at all? Did any of the investors win? If they did, then I would agree they were running a Ponzi scheme, not a good one of that either but it seems that there is no claims of winning either. It seems that every time when they solicited money from investors, they just end up losing the invested capital so that's why I suspect they were just very very very bad traders that almost made them thieves.

    https://www.tradingschools.org/reviews/day-trading-con-artists/