U.S. Promoter of Foreign Cryptocurrency Companies Sentenced to 60 Months in Prison for His Role in Multi-Million Dollar Securities Fraud Scheme
Earlier today, in federal court in Brooklyn, Tae Hung Kang, also known as “Kevin Kang,” pleaded guilty before United States Magistrate Judge Peggy Kuo to conspiring to commit securities fraud in connection with a scheme involving foreign exchange trading that targeted members of the Korean-American community. When sentenced, Kang faces up to five years in prison, as well as forfeiture and a fine. Kang has also agreed to pay restitution in the amount of $835,058.32.
Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today's plea, Kang is held accountable for his fraud and for betraying the trust of the Korean-American community who, believing in Kang's integrity, invested hundreds of thousands of dollars in his company's stock," stated Acting U.S. Attorney Lesko. "This Office is committed to safeguarding the investing public and protecting investors whose hard-earned money has been fraudulently misappropriated.” Mr. Lesko thanked the Federal Bureau of Investigation, New York Field Office, for their investigative work on the case, and the United States Commodities and Futures Trading Commission for their assistance during the investigation.
As set forth in court filings and today’s proceeding, Kang defrauded investors located in the Eastern District of New York and elsewhere in connection with foreign exchange trading which refers to trading one currency for another in an effort to profit from fluctuating exchange rates. Kang enticed investors to invest their money into stock issued by his company, Safety Capital Management, Inc. (“Safety Capital”), which did business as FOREXNPOWER. The investors were told their investments would be pooled by Kang and others to conduct foreign exchange trading, or to expand the FOREXNPOWER business. Kang falsely promised investors outsized returns at minimal risk. Ultimately, nearly all of the money that was invested in Safety Capital stock was misappropriated by Kang and his co-conspirators. Kang used some of the money stolen from clients to pay for advertisements targeting additional investors and promoting FOREXNPOWER’s outsized trading returns based on a algorithmic trading method that did not actually exist. Kang’s co-defendant John Won is awaiting trial.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Julia Nestor, Lauren Howard Elbert, Mathew S. Miller and Trial Attorney Gerald M. Moody, Jr., of the Criminal Division’s Fraud Section, are in charge of the prosecution.
TAE HUNG KANG (also known as “Kevin Kang”)
Bayside, New York
E.D.N.Y. Docket No. 18-CR-184 (RJD)
United States Attorney’s Office