In some cases business owners and others with a good reputation in the community and high-standing among colleagues and peers can come under suspicion of committing serious crimes and felonies. In certain instances these charges may be found to be unfounded or the product of a mistake. However, in other circumstances the explanation for the missing funds, unpaid taxes, or concealed accounts is not so innocent despite the individual’s previously sterling reputation.
The fact is that some professionals come to believe that their reputation and achievement puts them beyond suspicion. They believe that they can engage in improper actions, take money and assets that do not belong to them, and shortchange the government on tax and other obligations without arising suspicion. Unfortunately for those who hold this assumption it is not supported or well-founded and history is rife with examples of people caught and convicted despite professional achievement. People who believe that they can violate the law based on their reputation alone are likely to soon find themselves facing serious charges.
Orange County Attorney Charged with Tax & Wire Fraud
Attorney Stephen Young Kang was arrested at Los Angeles International airport while boarding a plane to Seoul, South Korea. Prosecutors charge that Stephen Young Kang of Newport Beach embezzled at least $8 million in investment funds provided by clients. Furthermore, prosecutors believe that Kang used the ill-gotten gains to finance a lifestyle beyond his means. Kang allegedly purchased high-end luxury items and paid personal expenses with the embezzled funds.
According to information presented by prosecutors in the indictment against Kang, Kang engaged in fraud against one of his clients, Ottogi America, Inc. The company had originally retained Mr. Kang to investigate and facilitate the purchase of additional real estate in the vicinity of its Gardena distribution center. Prosecutors state that Ottogi transferred approximately $3.7 million to Mr. Kang from October 2012 through March 2014. Mr. Kang was instructed to use the funds to purchase the property. However, he did not use the funds for the intended purposes. Prosecutors state that Mr. Kang redirected these funds from his attorney trust account to other accounts under his control. Once transferred, he allegedly used the funds to purchase luxury goods, for commercial ventures, and to satisfy existing debts.
Mr. Kang is also accused of committing other instances of fraud. The FBI reports that Mr. Kang also entered into an attorney-client relationship with a couple seeking EB-5 visa legal guidance. EB-5 is a type of immigration visa that permits wealthy foreigners to secure a green card in exchange for a qualifying investment into a U.S.-based commercial venture that creates or preserves at least 10 full-time jobs. Prosecutors charge that Kang accepted $1 million from the couple that Mr. Kang was supposed to invest. However, Kang is accused of using the funds to cover other personal and business expenses. Kang also apparently engaged in a scheme utilizing a life insurance policy.
In the tax evasion matter, Kang admitted that he failed to file a tax return in 2013 and used corporate accounts to further conceal income and assets. Kang admitted to receiving at least $1.5 million in income that he failed to report and worked to conceal.
Orange County Attorney Enters Guilty Plea on Tax & Wire Fraud Charges
On Thursday, November 12, 2015, Mr. Kang entered a guilty plea before a United States District Court judge. As part of a plea deal, Mr. Kang agreed to enter a guilty plea to wire fraud and tax evasion charges. When sentenced, Mr. Kang faces up to 45 years in federal prison. He is scheduled to be sentenced in February 2016. In light of the guilty plea U.S. Attorney Eileen M. Decker stated, “Attorneys owe their clients a special duty of loyalty and trust that is fundamental to our legal system. The Department of Justice will defend this principle by holding responsible those who violate this duty of loyalty for their own personal gain.” The FBI has stated that it believes additional fraud victims may exist in California, Texas, and South Korea. The agency encourages any person with further information regarding the fraud to contact the FBI’s Los Angeles Field Office.
Facing Serious Tax Charges? Rely on Our Experience
The tax professionals of The Tax Law Offices of David W. Klasing are experienced tax attorneys and CPAs who can work to mitigate the tax consequences you face. To schedule a reduced-rate consultation at our Los Angeles, Irvine, or San Diego law offices call 800-681-1295 today or contact us online.
