Former Representative Of Insurance And Investment Company Admits Stealing More Than $650,000 From The Company’s Clients
NEWARK, N.J. – A former registered representative of a broker-dealer offering investment products and services, including variable life insurance and annuities, today admitted using his position to steal more than $650,000 from the company’s clients, U.S. Attorney Paul J. Fishman announced.
Kwen Y. Chun, 58, of Midland Park, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of mail fraud.
According to documents filed in this case and statements made in court:
From September 1998 through June 2014, Chun was employed by the company as a registered agent, with authority to assist clients with withdrawing funds from annuities, applying for deferred annuities, and processing loan requests. Chun diverted funds that belonged to at least eight clients to bank accounts under his control and converted those funds to his own use.
Chun opened a bank account in the name of one client, using the client’s identification without the client’s knowledge or permission. Based upon false representations to the company that the client was requesting withdrawals and loans, Chun caused the company to wire monies from the client’s insurance policies and annuity accounts into the phony account. Chun also admitted that he caused the company to mail numerous checks to his Midland Park residence based upon false representations to the company that at least three other clients had requested to take loans on their insurance policies, which he then deposited into accounts under his control.
Chun admitted to causing other clients to obtain loans from company insurance policies, or to provide him with checks and cash, which Chun falsely advised he would use to open investment accounts on behalf of those clients. Instead, Chun deposited those loan proceeds into bank accounts under his control. He admitted that he provided one of the company’s clients with fabricated statements that purported to show the interest and balance in the client’s fictitious investment account. Chun also provided two other clients with paperwork that purported to illustrate the benefits that they would receive for their alleged annuity investment.
The mail fraud charge to which Chun pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Nov. 2, 2015.
U.S. Attorney Fishman praised inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; criminal investigators with the U.S. Attorney’s Office in Newark; the N.J. Bureau of Securities, Office of the N.J. Attorney General, under the direction of Acting Attorney General John J. Hoffman; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, for the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Joshua P. Cohn Esq., Saddle Brook, New Jersey