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National Insurance Crime Bureau

Online fraudster sentenced to prison for $700K “spoof” email scheme and more

U.S. Attorney’s Office – Southern District of Texas, November 10, 2020

HOUSTON – A 65-year-old man has been ordered to federal prison after he admitted to conspiring to commit money laundering for his role in a complex email fraud scheme, announced U.S. Attorney Ryan K. Patrick.

Kenenty Kim aka Myung Kim, of Firecrest, Washington, pleaded guilty June 2.

Today, U.S. District Judge George C. Hanks handed Kim a 108-month sentence to be immediately followed by three years of supervised release. He was further ordered to pay restitution of $745,540.70. At the hearing, the court heard additional testimony from witnesses describing the harm Kim’s actions caused to them. One described not only the harm caused to his company financially, but also the toll on his employees, relationships with other victims and effects on his and his workers’ personal lives. An attorney described the effect that this scheme had on his practice and noted how much more damaging this crime is for a sole practitioner such as himself rather than a large-sized firm.

In handing down the sentence, the court called Kim was a “fraudster” and a “con man.” Judge Hanks stated he did not believe Kim was sincere in his apology to the victims and only sorry for being caught.

“Business email compromise (BEC) is a pervasive threat and one of the most financially damaging online crimes,” said FBI Special Agent in Charge Perrye K. Turner. “It exploits the fact that so many of us rely on email to conduct business—both personal and professional. In this case, one of the victim companies notified law enforcement and the FBI was able to unmask Kim and put an end to his years-long theft and fraud.”

Kim engaged in a business email compromise scheme using “spoof” email addresses which have similar names to legitimate email accounts he hacked. He would then use the addresses to create fictitious transactions or to hijack legitimate transactions to convince a victim company or individual to send funds to a bank account Kim actually controlled.

For example, Kim created a spoof email account for a Pinehurst-based construction company. He then used that account to convince another company, based in Huntsville, to send over $200,000 to them. In reality, the account where they sent the funds was actually an account Kim controlled. He then took that money and moved it through several different bank accounts before placing it in an offshore account.

Kim also engaged in the same conduct against the parent company of several major appliance companies. Kim created a spoof account of one of its vendors and used it to convince the company to send more than $300,000 to what it thought was a vendor. The account was actually set up for a different shell company Kim created with a similar name. Again, Kim took that money and eventually placed it in an offshore account.

The court had also heard about Kim’s numerous credit card fraud and other schemes. In some of those, Kim created a system to process credit card payments. He would then obtain a victim’s personal identifying information and charge over $10,000 on their credit cards. Kim also had 36 different credit cards in a variety of names, four different Social Security numbers, two dates of birth, 11 different overlapping addresses and a prior real estate license suspension for engaging in fraud.

Another spoof email scheme victimized a medical device company for which Kim used an address at a Washington hotel known as a “drug den.” In yet another scheme, Kim promised to make individuals a million dollars flipping houses when, in fact, the houses he listed were not even for sale.

Kim acknowledged he gained over $700,000 from his various fraud schemes.

Kim has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation. Assistant U.S. Attorney Adam Laurence Goldman prosecuted the case.

Link.