United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

FORMER CHECK CASHING BUSINESS OWNER FACES TIME IN
FEDERAL PRISON FOR OPERATING WITHOUT A LICENSE

DALLAS - Yong Kyu Kim, who pled guilty in December 2006 to operating an “unlicensed money transmitting business,” was sentenced yesterday to serve one year and one day in prison, by U.S. District Judge Ed Kinkeade, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. Judge Kinkeade ordered that Kim surrender to the Bureau of Prisons on July 11, 2007. Kim will be deported after the completion of his sentence.

According to documents filed in the case, in January 2001, defendant Yong Kyu Kim purchased a pre-established business, R.H. Food Mart, located at 11390 Harry Hines Boulevard in Dallas County, Texas. Kim renamed the business “Lucky Grocery.” Despite its name, Lucky Grocery offered only a few snack items for sale, not a line of groceries. Lucky Grocery was a “financial institution,” as defined in 31 U.S.C. § 5312(a)(2)(K), as it was an issuer, redeemer and cashier of checks and money orders. Kim was the sole owner of Lucky Grocery, which he operated with his wife.

In 2001, the Internal Revenue Service (IRS) conducted a Title 31 educational visit at Lucky Grocery. The IRS routinely conducts such visits to advise new financial institutions about their record keeping and reporting obligations under the Bank Secrecy Act (BSA). During this visit, the IRS informed Kim that, pursuant to the money transmitting business registration requirements of 31 U.S.C. § 5330, he was required to register Lucky Grocery as a money services business with the Secretary of the Department of Treasury. The IRS also informed Kim that Lucky Grocery was required to file a Currency Transaction Report (CTR) for each currency transaction exceeding $10,000 and for each money order sale in the amount of $3,000 or more.

In 2003, the IRS returned to Lucky Grocery to conduct a Title 31 compliance examination. During the examination, the IRS advised Kim that there was no record of Lucky Grocery’s registration with the Secretary of the Department of Treasury. Kim produced a Registration of Money Services Business that he had completed and signed on behalf of Lucky Grocery on March 26, 2003, but had not yet filed. Kim operated Lucky Grocery without a license for more than a year. During this same compliance examination, the IRS discovered that Lucky Grocery had not been complying with BSA record keeping and reporting requirements. Specifically, Lucky Grocery had not filed any CTRs for cash transactions exceeding $10,000 or money order sales in amounts of $3,000 or more.

 Despite the 2003 compliance visit, Lucky Grocery continued to cash checks in amounts exceeding $10,000 and sell money orders in amounts of $3,000 and more without filing CTRs. The IRS subsequently referred the case to its Criminal Investigation division.

At sentencing, the government presented evidence that Kim cashed checks and sold money orders without filing the requisite CTRs in an amount in excess of $1 million. The evidence also showed that some of the money orders were cashed in the Middle East. Because Kim did not file CTRs, however, the government is unable to determine who purchased the money orders or how the money was used. The government also called witnesses who testified that they used Lucky Grocery to facilitate the commission of federal crimes, including tax evasion and willful failure to collect or pay over tax.

The case was investigated by the Internal Revenue Service - Criminal Investigation and prosecuted by Assistant U.S. Attorney Tammy Reno.

###