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SECOND KEY PLAYER IN IRVINE-BASED PONZI PLEADS GUILTY IN $8 MILLION SCHEME THAT TARGETED KOREAN-AMERICANS

FOR IMMEDIATE RELEASE
February 7, 2011

SANTA ANA, California – The bookkeeper for an Irvine investment firm pleaded guilty late this afternoon to a federal wire fraud charge and admitted that she helped the owner of the company run a Ponzi scheme that collected more than $8 million from approximately 60 primarily Korean-American victims.

Sang Yi, 40, who until her arrest last year resided in the Harbor City district of Los Angeles, pleaded guilty to the felony fraud charge before United States District Judge James V. Selna.

Yi’s boyfriend, Euirang Hwang, 37, who also resided in Harbor City, recently pleaded guilty in this case. Hwang, who was the founder and chairman of Pinupito Inc., the fraudulent investment company that operated out of offices in Irvine, pleaded guilty to a wire fraud charge in December.

Yi, a South Korean citizen who was the president and secretary of Pinupito, is scheduled to be sentenced by Judge Selna on June 6. Hwang, a naturalized United States citizen, is scheduled to be sentenced on April 4.

According to court documents, Hwang and Yi promised investors high annual returns with false representations that Pinupito generated income by buying smaller companies in Korea, growing them, and selling them for a large profit. Investors were falsely told that Hwang was a billionaire and that his profitable company had extensive holdings in Korean businesses and real estate.

When they pleaded guilty, Hwang and Yi both admitted that they made false representations to investors. The money collected from investors was not used to finance Pinupito’s operations, but rather was used to pay, among other things, luxury car leases, personal expenses and returns to existing investors, according to court documents.

Hwang and Yi marketed Pinupito to members of the Korean-American community, soliciting some investors during meetings held at Korean-language churches.

As a result of pleading guilty to wire fraud, Hwang and Yi each face a statutory maximum penalty of 20 years in federal prison.

The case against Hwang and Yi is the result of an investigation by the Federal Bureau of Investigation.

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Release No. 11-017

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