$6.7M Embezzled By Former Montgomery County Official

ROCKVILLE, MD — A former Montgomery County official pleaded guilty Friday to embezzling more than $6.7 million in county funds and making false statements on his tax returns, according to a press statement from the U.S. Department of Justice. Byung Il Bang — also known as Peter Bang — was the chief operating officer of the Department of Economic Development for the county from 2010 to 2016.

Bang, 59, faces up to 20 years in federal prison for wire fraud, and three years for making false statements on his tax returns, prosecutors said. He is scheduled to be sentenced on Feb. 22, 2019.

During his tenure, Bang was responsible for disbursing county money to various small businesses, teaching them how to successfully run a company, and helping them get below-market rent rates, according to the press statement.

The funds he used came from county sources, such as the Maryland Conference & Visitors Bureau and the Maryland Economic Development Corporation. Prosecutors said that Bang was able to disburse the money with little oversight or authorization.

Within Bang's first year as department head, Montgomery County and South Korea agreed to create an incubator fund called Chungbuk Incubator Fund LLC. Federal officials said Bang opened four banks under the company's name and listed his home address as the business' address. Bang was then able to embezzle millions of taxpayer dollars.

"Stealing money from county taxpayers is one of the worst things that any public employee can engage in," Montgomery County Executive Ike Leggett said in a statement. "That's exactly what this individual has done."

In a span of six years, the former department head fraudulently funneled $6.7 million from the county government to the bank accounts, prosecutors said.

According to the Justice Department, $5.4 million came from the Montgomery County Department of Finance; $1.2 million came from the Maryland Economic Development Corporation; and $43,717 came from the Maryland Conference & Visitors Bureau.

In addition to embezzling millions, Bang told federal officials that he lied on his county financial disclosure statements from 2012 to 2016.

"Bang took advantage of the fact that Economic Development funds are exempt — under county policy — from the county’s usual procurement oversight procedures, an exemption designed to give the former Department of Economic Development more flexibility in creating and attracting new jobs and investment," Leggett said. "That put more responsibility on the Department of Economic Development itself for oversight. Mr. Bang was able to exploit his past reputation as a highly effective employee and his knowledge of established County procedures."

In Leggett's press statement, he said that the county "retained an independent forensic auditing firm" in 2017 to review Bang's transactions for the past 10 years. Leggett also said that the former department head acted alone.

After learning about Bang's actions, Leggett said he implemented a program to prevent fraud and abuse in county government. Some initiatives include creating a new "Compliance Unit" within the Department of Finance, training all county managers, and increasing oversight over payment processing.

Bang, as part of his plea agreement, must "pay restitution in the full amount of the victims’ losses, and to plead guilty in the Circuit Court for Montgomery County, to the state charges of theft scheme over $100,000, and misconduct in office," the Justice Department said.

Image via Shutterstock

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