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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Washington

Friday, March 8, 2013

Pierce County Man Sentenced to 72 Months in Prison for Interstate Prostitution and Money Laundering Conspiracies, and Tax Fraud

Owned Nightclub Using Korean Nationals To Work As Prostitutes

            A Milton, Washington man who owned a Federal Way Korean bar where Korean National women were promoted for prostitution was sentenced today to 72 months in prison and five years of supervised release, announced U.S. Attorney Jenny A. Durkan.  CHANG YOUNG KIM, 59, was also ordered to pay $112,050 in restitution and over $1.6 million in back taxes and penalties to the Internal Revenue Service.  KIM pleaded guilty in November 2012 to conspiracy to transport individuals for prostitution, conspiracy to engage in money laundering, bribery of a public official and tax evasion.  KIM owned the Blue Moon Korean bar business in Federal Way which utilized Korean National women working illegally as ‘bar girls’ and prostitutes.  KIM was indicted in three separate criminal schemes, some related to the club, and others to fraudulent business dealings.  At sentencing U.S. District Judge Ronald B. Leighton said to the defendant, “you were a one-man criminal enterprise . . . [and] the most instrumental of everyone on a host of fronts.”

During 2010 and 2011, KIM owned the Blue Moon using ‘madam’ Miyoung Roberts, 42, of Auburn, Washington to recruit and manage more than two dozen “bar girls” and arranging their transportation from Korea to the U.S.  KIM and his co-defendants arranged apartments for the women to live in and supervised some of the women’s prostitution activities.  During the undercover investigation by law enforcement, KIM offered and paid $15,000 to a Washington State Liquor Control Board investigator believing the investigator was corrupt and that he was getting advance warning of inspections.  The investigator was reporting the bribes as part of the undercover investigation.

In a separate scheme, KIM convinced two clients of his real estate company, Royal Realty, to invest $400,000 in the purchase of a Cle Elum, Washington motel.  However there was no deal to purchase the property and KIM and two co-conspirators used the money for their own expenses.  Finally, KIM attempted to evade more than $1.6 million in income taxes by failing to report income and by putting assets in other people’s names.

In asking for a significant sentence prosecutors wrote to the court that KIM “has spent a good part of his adult life steeped in fraud and deception.  ….In order to commit these crimes, the defendant was willing to use his family members to further his personal objectives, causing them to place themselves in financial and legal jeopardy.  He was willing to violate the law through bribery….. It is as though the defendant had no limits as to how far he would go to lie, cheat, and steal.”

“Kim operated a sex club a few blocks away from homes and schools, degrading the quality of life in the community as well as the women involved,” said Brad Bench, special agent in charge of HSI Seattle.  “HSI will continue to work closely with its law enforcement partners to attack and dismantle these kinds of enterprises that prey on the vulnerable and often bring other criminal activity into the area.”

“Our communities deserve better than to have human trafficking going on in them,” said Kenneth J. Hines, Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest. “IRS Special Agents bring their unique skills in conducting financial investigations, ranging from tax evasion to money laundering, to the team of law enforcement professionals working to erase this type of crime from our region.”

The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the Internal Revenue Service Criminal Investigation (IRS-CI), the Washington State Liquor Control Board (WSLCB), the Federal Way Police Department, Lakewood Police Department, and the Federal Bureau of Investigation.

The case was prosecuted by Assistant United States Attorney Ye-Ting Woo.

Updated March 24, 2015