Last Updated on March 23, 2018 3:18 pm
CHARLOTTE, N.C. – Ho Shin Lee, 31, of Los Angeles, California, was indicted by a federal grand jury in Charlotte for laundering more than $1.9 million stolen from Appalachian State University, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. The 14-count indictment was unsealed today, following Lee’s arrest in California.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Murray in making today’s announcement.
According to allegations contained in the indictment, on or about November 18, 2016, Lee applied to the Secretary of State of California to register Royce Hub Trading, Inc. as a corporation in California, claiming that the corporation was in the business “general merchandise.” Lee represented himself to be the Chief Executive Officer, Secretary, and Chief Financial Officer of Royce Hub Trading. The indictment alleges that on or about November 23, 2016, Lee opened a bank account with a financial institution in Los Angeles in the name of Royce Hub Trading, Inc. Lee claimed to be president of Royce Hub Trading and was the sole account holder.
Court documents indicate that in 2016, Appalachian State University (“Appalachian State”) awarded a contract to Rodgers Builders to build a new health sciences building at the university. On or about December 2, 2016, an employee at Appalachian State received an email from an unidentified individual purporting to be D.M., an employee of Rodgers Builders. The e- mail was sent from email@example.com. The legitimate e-mail address for Rodgers Builders was “rodgersbuilders.com.” The fraudulent e-mail contained a direct deposit form and instructions to change Rodgers Builders’ previously submitted banking information to Lee’s newly opened bank account.
The indictment alleges that the Appalachian State employee changed the payment information as directed by the fraudulent e-mail, and on or about December 8, 2016, a payment of approximately $1,959,925.02 intended for Rodgers Builders by Appalachian State was directed to the bank account controlled by Lee.
According to the indictment, on or about December 12, 2016, Lee received the fraud proceeds, and quickly transferred the funds through a series of financial transactions out of his bank account, knowing that the transactions were designed to conceal the nature, location, source, ownership, and control of the fraud proceeds.
Lee is charged with fourteen counts of money laundering. The maximum penalty for the each charge is twenty years in prison and a $ 500,000 fine.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The FBI investigated the case. Assistant U.S. Attorney Kelli Ferry is in charge of the prosecution.
On January 24, 2018, U.S. Attorney Murray announced that $1,542,442.33 would be distributed to Appalachian State, following successful civil forfeiture proceedings against money seized from bank accounts controlled by the alleged fraudsters who targeted the university.