Newport Beach Attorney Gets 5 Years for Bilking Clients for $8 Million

NEWPORT BEACH, CA A Newport Beach attorney was sentenced today to five years and three months in federal prison for bilking clients out of $8 million in an investment fraud scheme and using the money for personal expenses and luxury items.

Stephen Young Kang, 46, pleaded guilty in November to two counts of wire fraud and one count of tax evasion.

Kang admitted in a plea agreement filed in Los Angeles federal court that, beginning as early as October 2012 and continuing through September, he “knowingly and with intent to defraud, devised, participated in, and executed a scheme to defraud clients to whom defendant had agreed to provide legal or investment services,” according to the U.S. Attorney’s Office.

Kang admitted that he defrauded a food distribution company, Ottogi America, that had hired him to help the company purchase properties near its distribution center in Gardena.

Ottogi transferred funds to a trust account in Houston, Texas, to be used for the purchase of the properties, but Kang caused the money to be deposited in other accounts that he controlled, federal prosecutors said.

Prosecutors believe that Kang then used a substantial portion of Ottogi’s money to pay for personal expenses and business ventures, as well as to make partial payment to other victims.

Kang also admitted defrauding a Texas victim out of $500,000, officials said.

In a tax evasion count, Kang admitted that he received at least $1.5 million in income in 2013, but attempted to evade the assessment of income tax by failing to file a return and using corporate accounts to conceal the money, prosecutors said.

City News Service: Photo: Shutterstock