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Rita S. Kim, 49, of Fort Lee, and Hyon-Suk “Clara” Chung, 50, of North Bergen, each pleaded guilty yesterday in federal court in Newark to conspiring to commit mail and wire fraud.
Kim and Chung admitted they attached the identities of nearly 100 people with “blank slates” for credit scores to their own credit card accounts, then boosted those credit scores to between 700-800, as part of an operation run by Sang-Hyun “Jimmy” Park.
Park obtained Social Security cards beginning with the prefix “586,” which were issued by the United States to the individuals, usually from China, who were employed in American territories, such as Guam, the government said. He admitted that he and his co-conspirators paid Kim, Chung and others to boost the scores.
Park and his associates then opened bank accounts and obtained credit cards, lines of credits and loans guaranteed by the U.S. Small Business Administration.
Colluding merchants, many of them Korean, also helped Park’s group obtain cash by swiping credit cards for phantom goods and services, U.S. Attorney Paul J. Fishman said. For what was known as a “kkang fee,” the collusive merchants charged the fraudulently obtained credit cards, although no transaction took place.
As soon as the money landed in their bank accounts, the merchants passed the money up to Park, minus the fee.
They sold the cards for $5,000 to $7,000 and then helped customers from in and around Palisades Park get driver’s licenses and other identification cards from various states.
Park’s group also used the cards to buy luxury cars, expensive merchandise and liquor, and to withdraw money from accounts with insufficient funds before anyone noticed, federal authorities said. They also wrote checks to pay down the cards and then charged quickly them to the max.
In one case, ring members leased Lexuses or Mercedes, made one payment, then sold the cars, the FBI said.
The bills ended up going to people on the other side of the globe who had no idea what happened. The banks, in turn, took a bath — to the tune of more than $4 million in losses, Fishman said.
Park was so brazen that he advertised in local Korean newspapers that he and his co-conspirators “could obtain driver’s licenses, credit cards, and money for their customers, virtually all of whom were of Korean descent,” according to a 138-page federal arrest complaint.
He pleaded guilty in January, 2012 and is still awaiting sentencing.
More than 50 others have also pleaded guilty in the massive case and have been sentenced or are awaiting sentencing. Two remain at large, Fishman said yesterday.
Just about all of them were rousted from their beds early the morning of Sept. 16, 2010 by hundreds of federal and local investigators in Palisades Park, Tenafly, River Edge and elsewhere.
They were then brought to FBI headquarters in Newark.
Forty-two of those originally charged were directly involved in the massive fraud ring, authorities said.
One of them, Kang Hyok Choi of Long Island, was already in custody, awaiting trial for a triple murder in Tenafly. Detectives from the Bergen County Prosecutor’s Office alerted the FBI after finding evidence of the ID theft ring on a computer they found in the house.
It was the first break in what became one of the largest identify fraud cases prosecuted in New Jersey.
One of the defendants, Yoon-Sang Kim of Allendale, was arrested in Fort Lee while driving a vehicle registered to his wife, authorities said. In the car, police found several counterfeit IDs with Kim’s photograph in other people’s names, some of which were used to open bogus bank accounts.
Authorities won’t say who tipped them off to the breadth of the operation. However, some observers told CLIFFVIEW PILOT they would put their money on Choi, who it’s believed struck a deal for leniency in exchange for inside information about the crew.
Fishman praised special agents of the FBI, IRS – Criminal Investigation, the Department of Homeland Security’s Immigration and Customs Enforcement Homeland Security Investigations, and the Bergen County Prosecutor’s Office with doing the investigative work.
Handling the case for the government are Assistant U.S. Attorneys Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit and Jane Yoon of the Healthcare and Government Fraud Unit in Newark.
U.S. District Court Judge Katharine S. Hayden set sentencing for Kim and Chang for Jan. 8, 2014.
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