Let's take a look at the creation of "Private Invstement Firms"...unregulated, not secured, ......not insured......
Former Hedge Fund Principal Pleads Guilty In $195 Million Fraud
April 21, 2008 in Securities Fraud by Dave Westheimer | No comments
John B. Kim, also known as Jung Bae Kim, pleaded guilty on Thursday to a single count of wire fraud in connection with the collapse of hedge funds operated by KL Group LLC, originally in California and later in Palm Beach County, Florida. His plea was entered before US District Court Judge Kenneth Ryskamp in West Palm Beach. John Kim, his brother Yung Kim and Won Sok Lee were indicted in January 2007 on 35 counts alleging a massive investment fraud scheme which caused investor losses of $195 million. In his plea, John Kim admitted misrepresenting unprofitable funds as successful, sending out false account statements and counterfeiting clearing firm statements. In the specific count covered by the guilty plea,
Kim admitted that in February, 2005, fictitious stock trading sheets were created that purported to show a one-day profit of $22 million in a stock known as RIMM, the company that manufacturers the “Blackberry” device. The RIMM trade, however, never took place, and the fictitious stock trading sheets were used to fool investors concerning the profitability of trades being conducted by the KL Hedge Funds.
John Kim faces a maximum of 20 years in prison. Sentencing is set for July 17. Yung Kim pleaded guilty to fraud charges in July and is awaiting sentencing; Lee is still at large (South Florida Business Journal, DOJ).
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