Middleman Pleads Guilty In Foreign Bribery And Fraud Scheme Involving Potential $800 Million International Real Estate Deal
Defendant Double-Crossed His Co-Conspirators and Stole a $500,000 Bribe Intended to Influence a South Korean Company’s Sale of the Landmark 72 Building in Hanoi, Vietnam
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Kenneth A. Blanco, Acting Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, announced that MALCOLM HARRIS pled guilty to wire fraud and money laundering charges arising from his role as a middleman in a corrupt scheme to pay millions of dollars in bribes to a foreign official (“Foreign Official-1”) of a country in the Middle East (“Country-1”). The bribes were intended to facilitate the sale by South Korean construction company Keangnam Enterprises Co., Ltd. (“Keangnam”) of a 72-story commercial building known as Landmark 72 in Hanoi, Vietnam, to Country-1’s sovereign wealth fund (the “Fund”) for $800 million. Instead of paying an initial $500,000 bribe to Foreign Official-1 as he had promised, HARRIS simply pocketed the money and spent it on himself. HARRIS pled guilty before U.S. District Judge Edgardo Ramos, who is scheduled to sentence HARRIS on September 27, 2017.
Acting U.S. Attorney Joon H. Kim said: “As he has now admitted, Malcolm Harris schemed to bribe a foreign official, and then double-crossed even his own co-conspirators, pocketing $500,000 intended as a bribe. Harris then spent that money on his own lavish personal expenses. As the saying goes, there is no honor among thieves, and Harris confirmed that today with his guilty plea.”
According to the allegations contained in the Indictment to which HARRIS pled guilty, and statements made during the plea and other court proceedings:
From in or about March 2013 through in or about May 2015, HARRIS’s co-defendants Joo Hyun Bahn, a/k/a “Dennis Bahn” (“Bahn”), and his father Ban Ki Sang (“Ban”) engaged in an international conspiracy to bribe Foreign Official-1 in connection with the attempted $800 million sale of a building complex in Hanoi, Vietnam, known as Landmark 72. During this time, Ban was a senior executive at Keangnam, a South Korean construction company that built and owned Landmark 72. Ban convinced Keangnam to hire his son Bahn, who worked as a broker at a commercial real estate firm in Manhattan, to secure an investor for Landmark 72.
Instead of obtaining financing through legitimate channels, Bahn and Ban engaged in a corrupt scheme to pay bribes to Foreign Official-1, through HARRIS, who held himself out as an agent of Foreign Official-1, to induce Foreign Official-1 to use his influence to convince the Fund to acquire Landmark 72 for approximately $800 million. In furtherance of the scheme, HARRIS sent Bahn numerous emails purportedly sent by Foreign Official-1 and bearing Foreign Official-1’s name. In or about April 2014, following communications with HARRIS, Bahn and Ban agreed to pay, through HARRIS, a $500,000 upfront bribe and a $2 million bribe upon the close of the sale of Landmark 72 to Foreign Official-1 on behalf of Keangnam.
Unbeknownst to Bahn or Ban, however, HARRIS did not have the claimed relationship with Foreign Official-1 and did not intend to pay the bribe money to Foreign Official-1. Instead, HARRIS simply stole the $500,000 upfront bribe arranged by Bahn and Ban, which HARRIS then spent on lavish personal expenses, including rent for a luxury penthouse apartment in Williamsburg, Brooklyn.
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HARRIS, 53, of San Miguel de Allende, Mexico, and formerly of New York, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of conducting monetary transactions in illicit funds, which carries a maximum sentence of 10 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only as any sentencing of the defendant will be determined by the judge.
The case against Bahn is pending before Judge Ramos, and Ban is a fugitive believed to be residing in South Korea. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.
Mr. Kim praised the outstanding investigative work of the International Corruption Squad of the FBI’s New York Field Office. Mr. Kim also thanked the Department of Justice’s Office of International Affairs for its ongoing assistance in this investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Daniel S. Noble and Trial Attorney Dennis R. Kihm of the Fraud Section of the Justice Department’s Criminal Division are in charge of the prosecution.