SACRAMENTO, Calif. — Kyung Min Kong, 55, a citizen and national of South Korea, was sentenced today to seven years and nine months in prison for bank fraud, money laundering and aggravated identity theft, U.S. Attorney Phillip A. Talbert announced.
According to court documents, between March 2014, and March 2018, Kong participated in a nationwide check kiting “bust out” scheme in order to obtain cash from banks. The scheme’s participants obtained a real Republic of Korea passport that was altered to bear a new photograph and name, which they used to open bank accounts with a small amount of cash. The accounts were dormant until a time the participants believed the bank would allow the account holder to deposit a check and make withdrawals before the check actually cleared. At that time, the participants wrote checks from a different bank account with non-sufficient funds, deposited those checks into the dormant account, and then withdrew cash from the dormant account before the checks cleared. The participants would access funds by purchasing a money order and then deposit the money order into yet another bank account associated with the scheme.
Kong is associated with opening source accounts or draining victim accounts from at least 25 different financial institutions. These bust-outs resulted in an actual loss of $2,574,161 to the banks, and an intended loss of $3,698,465 based on additional, unsuccessful bust-out attempts.
Kong is the first defendant to be sentenced in this case. Co-defendant Jeffrey Kim is scheduled to be sentenced Jan. 26, 2023, and co-defendant Jong Eun Lee is scheduled to be sentenced on Dec. 1, 2022. Charges are pending against the remaining co-defendants: Ki Jang, Hee Soung Oh, and Bon Soke Hong, who were all indicted on Oct. 21, 2021. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the IRS Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorney Audrey B. Hemesath is prosecuting the case.