Last Accused KL Financial Fraudster Finally Faces U.S. Court

Apr 6 2009 | 2:06am ET

A fugitive no more, accused hedge fund fraudster Won Sok Lee returned to Florida in handcuffs last week and was ordered held without bail.

Lee, a partner in the collapsed West Palm Beach, Fla.-based hedge fund KL Financial, was indicted along with two others in December 2006 on 35 counts of conspiracy, mail fraud and money laundering. But he fled the U.S. before having to face the music.

Lee was arrested earlier this year in South Korea, as he attempted to board a flight to Argentina. He was extradited last week.

A federal judge in West Palm Beach ordered Lee held without bail on Friday, with prosecutors making the obvious argument that the one-time fugitive is a flight risk. Lee, who has yet to hire a lawyer, will be back in court on Friday.

Prosecutors say that Lee and his partners, brothers Jung Bae Kim, better known as John Kim, and Yung Bae Kim, ripped 250 investors off to the tune of $194 million between 2000 and 2005. The trio allegedly pretended that John Kim was a hugely successful day-trader with a proprietary system that earned triple-digit returns. Authorities say KL sent out bogus account statements showing big profits when, in fact, the firm lost some $30 million it did trade, with Lee and the Kims stealing the rest.

After pleading guilty to the charges, John Kim was sentenced to more than 18 years in prison; his brother, who also pleaded guilty, received more than 6 years.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.