Federal prosecutors say nearly 60 people fell victim to the couple, who U.S. District Judge Thomas Zilly said specifically targeted religious victims and "used God as way to gain trust."
A Clyde Hill couple who preyed on Christian investors to finance an opulent lifestyle that included a 9,000-square-foot home, a 45-foot yacht, vacations in Tahiti and a number of luxury vehicles — including a Maserati and a Lamborghini — have been sentenced to federal prison for bilking their clients out of more than $12 million over eight years.
Federal prosecutors say nearly 60 people fell victim to Sung “Lawrence” Hong, 47, and his wife, Hyun Joo “Grace” Hong, 42, who U.S. District Judge Thomas Zilly said specifically targeted religious victims and “used God as way to gain trust.” At a hearing on Thursday, Zilly sent Lawrence Hong to prison for 15 years, and his wife to prison for six.
Lawrence Hong, according to court records, had already served three years in federal prison on an earlier investment scam.
“Using faith and fraud, this couple stole millions from people whose dreams of a better life have now been shattered,” said U.S. Attorney Annette L. Hayes. “Both repeatedly lied to their investors, all while spending their [victims’] hard-earned money on high-end shopping sprees, luxurious vacations, a yacht and an expensive rental home.”
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Because they have three children under 6 years old, the judge gave Grace Hong until January to make arrangements for the children’s care and report to prison, according to a spokeswoman with the U.S. Attorney’s Office.
According to documents filed in the government’s case, the Hongs set up a phony hedge fund called Pishon Holdings, gave themselves phony degrees, disseminated plagiarized investment outlooks and claimed to be experienced investment advisers in order to hoodwink credulous investors.
The Hongs claimed that Lawrence Hong had privately, and successfully, invested billions of dollars for wealthy Korean families and that Grace Hong held a Series 65 securities license and previously worked for a large international investment firm, court documents show.
None of these statements was true, according to the U.S. Attorney’s Office.
One church in California invested $1 million with the Hongs and lost about $300,000 on a single trade, court records show. In addition, the church lost another $150,000 to adviser fees to the Hongs, the government said. A couple allowed the Hongs to manage their $180,000 in retirement funds only to lose $100,000 within less than a year, according to the court record. After meeting with the Hongs, the victims then invested their remaining retirement funds in the Hongs’ hedge fund, only for those funds to be redeposited into Grace Hong’s personal account.
The Hongs then used those funds to pay credit-card bills and other personal expenses, including a $16,000 payment to a resort in the Bahamas for a family vacation, court records show.
Among the government’s evidence was a video of the Hongs speaking at a California church conference in which Grace Hong cried and claimed God had directed her to use her moneymaking skills to help other Christians.
“We wanted to create something where churches can be sustainable, so God kept saying it’s not about giving finances, but it’s about using the talents that I gave you both,” said Grace Hong during the videotaped conference. “So that was the premise, that was the intention behind creating our company. The name of our company is Pishon, which is the first river that flows. It’s in Genesis.”
In sentencing Lawrence Hong, Zilly noted his prior conviction for a similar fraud and said, “You clearly did not learn anything from the fact you were convicted and sentenced to prison. … You are one of those con men who will never be able to stop conning people.”
He also said that Grace Hong had misrepresented her credentials and used God’s name to put money in her own pockets.
Although Zilly ordered the two to pay more than $12.7 million in restitution, the U.S. Attorney said some victims lost their entire life savings and will never recover financially.