NEWARK – A Palisades Park man pleaded guilty today for orchestrating a bank fraud scheme involving approximately $20 million of fraudulent home equity and business lines of credit, U.S. Attorney Christopher J. Christie announced.

Jacob Kim, 53, pleaded guilty before U.S. District Judge Peter G. Sheridan to conspiracy to commit bank fraud. Judge Sheridan continued the defendant’s detention and scheduled sentencing for Nov. 6.

Kim, who was president of American Macro Growth (AMG) in Palisades Park, was indicted in June 2007 along with four AMG employees and eight AMG clients. Kim was a fugitive from justice until arrested on May 5 while taking swings at the Alley Pond Golf Center in Queens, N.Y.. The arrest capped off an intensive fugitive hunt that involved law enforcement personnel from the FBI, Federal Deposit Insurance Corporation and Bergen County Prosecutor’s Office.

At his plea hearing, Kim admitted that he engaged in a conspiracy with AMG employees and clients to fraudulently obtain millions of dollars in home equity and business lines of credit from at least 16 different lenders in northern New Jersey between February 2004 and November 2005. Kim specifically admitted receiving $59,519 in commission payments from one AMG client for assisting the client in obtaining lines of credit from 10 different banks, which totaled approximately $1.35 million, by using the same property as collateral for each of the loans. Kim also admitted that he obtained falsified income tax returns and submitted those returns to the banks on behalf of his clients. He further admitted instructing his employees in the means and methods of perpetrating the scheme.

Kim admitted that AMG and its clients executed the scheme by closing on multiple home equity lines of credit, or HELOCs, in a short period of time so that the earlier lenders’ security interests would not be publicly recorded at the time that later lenders closed on subsequent loans. The scheme effectively stripped lenders of security for the loans.

The victims of the scheme include Banco Popular, Bank of America, The Bank of New York, Citibank, Commerce Bank, Fleet Bank, JP Morgan Chase Bank, HSBC Bank, Hudson United Bank, North Fork Bank, PNC Bank, Sovereign Bank, Wachovia Bank, Washington Mutual Bank, Wells Fargo Bank and Countrywide Home Loans, Inc.

Special Agents with the FBI arrested Kim’s wife, Se Ran Cho, 35, on May 2. Cho is charged by Complaint as a conspirator in the scheme for her role in opening and maintaining bank accounts that Kim used to deposit the proceeds of the scheme.

Ten people – all clients of Kim and AMG – pleaded guilty to conspiracy in January and March of this year. Since that time, three additional defendants also have pleaded guilty.

They are Jin Hee Song, 37, of Flushing, N.Y., who was an AMG client; Jun Hwang, 42, of Cliffside Park, who was a broker employed by AMG; and Justin Kim, 27, of Palisades Park, also an AMG broker and employee. Three additional AMG clients have been arrested and are awaiting trial: Sun Hee Lim, 38, of Fort Lee; Hye Sung Park, 38, of Queens, N.Y.; and Hyeong Ju Lee, 34, of Edgewater.

Two AMG employees and four AMG clients remain at large and are wanted by the FBI. They are: Jeff Kim (a/k/a Woo Jung Kim), 38, of Palisades Park; James Park, 42, of Hackensack; Tae Woo Lee, 43, of Palisades Park; Hyun M. Kim, 36, of Palisades Park; Dong Jin Kim, 54, of Palisades Park; and Ma Dung Kim, 51, of Maywood. Anyone having information about their whereabouts can report the information anonymously to the FBI by calling the FBI’s main number at 973-792-3000.

The charge of conspiracy to commit bank fraud carries a maximum statutory penalty of 30 years in prison and a fine of $1 million or twice the aggregate loss to the victims or gain to the defendants, whichever is greatest.

In determining an actual sentence, Judge Sheridan will consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.

Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Weysan Dun, and the Federal Deposit Insurance Corporation, under the direction of Special Agent in Charge Gary Sherrill, with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorney Bradley A. Harsch of the Criminal Division in Newark.

 

Defense Counsel: Kenneth W. Kayser, Esq., Livingston, NJ