Peter C. Son Sentenced To 15 Years In Forex Ponzi Scheme That Targeted Korean-Americans; Courtroom Spectator Heckled Scammer, Declaring He Deserved Death For Crime
Prior to the sentencing of Peter C. Son of Danville, a courtroom spectator yelled in Korean that “You’ve got to kill that bastard!” according to the San Francisco Chronicle.
In June 2009, the SEC accused Son, 38, and his business partner, Jin K. Chung, of Los Altos, of targeting Korean-Americans in a scheme in which “funds were not traded in the forex market as claimed.”
Instead, the SEC said, the funds were used to pay cash “returns” to certain investors in “Ponzi-like fashion” and used to make mortgage payments on Son’s multimillion-dollar home.
“Supposed” Forex returns were “faked,” and investors were given “monthly account statements showing fictitious returns,” the SEC said.
Some of the funds were used to pay a $3,000 monthly salary to Son’s wife, who “did no work,” the SEC said. As the scheme was collapsing in 2008, funds were transferred “overseas,” the agency charged.
Investors were invited to the scheme’s offices purportedly to “view work stations with multiple trading monitors, ostensibly set up to allow . . .Â employees to monitor market conditions relevant to forex trading,” the SEC said.
But representations of Forex success were “false,” and the scheme “conducted little or no forex trading,” the SEC charged.
The “supposed forex investment program was a fabrication used by Son and Chung to attract investors,” the SEC charged.
Chung has not been not charged criminally.
The scheme operated through a company known as SNC Asset Management Inc. (SNCA) of Pleasanton, Calif. It also operated through a company in New York that had a similar name — SNC Investments Inc. (SNCI) — investigators said.
About 500 investors were defrauded, the SEC said.
It is not unusual for companies to use multiple names — including confusingly similar names — to pull off a fraud scheme. Nor is it unusual for fraudulent companies to claim they have a local, regional, national or international footprint to disarm skeptical investors.
Son’s scheme, fueled by advertisements and word-of-mouth, pulled in investors from at least five U.S. states, South Korea and Taiwan, the SEC said. His home in a gated community was valued at $2.6 million, and Son used investors’ money to pay “country club dues,” the agency charged.
Part of the scheme involved an advertisement that had been altered to appear as through it were an article in Business Week magazine.
It is common in fraud schemes for operators to imply their product or service is endorsed by famous people or companies. In 2009, members of the failed AdViewGlobal autosurf used the logo of Forbes magazine in a sales promo.
Separately, members of the alleged AdSurfDaily autosurf Ponzi scheme claimed the program’s operator, Andy Bowdoin, received a special award from the White House for business acumen.
Read the Son story in the San Francisco Chronicle.