Queens-Based Trading Fraud Scheme Cost Investors $1.1M: Feds

BAYSIDE, QUEENS -- Federal agents arrested two Queens men on Thursday for allegedly conning dozens of investors out of more than $1.1 million in a foreign exchange trading scheme that targeted Korean Americans.

Tae Hung Kang, 55, of Bayside, and John Won, 49, of Flushing, are accused of "preying upon the kinship of their target group" and lying about their trading credentials to con them into investing into or opening accounts with their company, Forexnpower, prosecutors said.

"As alleged in the indictment, Kang and Won lured investors with false promises of great profits to be made in the foreign exchange market, and then stole their money," said U.S. Eastern District Attorney Richard Donoghue.

Kan and Won are accused of conning investors in two schemes, both of which involved foreign exchange trading, or trading one currency for another to make a profit off fluctuating exchange rates, prosecutors said.

In the first alleged scheme, the pair advertised in local Korean-language newspapers enticing investors to open foreign exchange trading accounts with Forexnpower, according to an indictment unsealed in a Brooklyn federal court Thursday.

They claimed to have a secret algorithmic trading method that would generate large profits at low risk, and promised investors double-digit returns on their money, according to court documents.

But the two actually had little trading experience and their algorithmic trading method never performed as promised, costing investors around $400,000 in losses to their trading accounts, prosecutors said.

In yet another alleged scheme, the two are accused of persuading investors to put their money into stocks with Safety Capital Management, which did business as Forexnpower, according to the charges.

Kang allegedly told investors he and others would pool their money into foreign exchange trading or to grow the Forexnpower business and, again, promised large profits in return. But prosecutors say they stole nearly all the money invested - around $700,000 - to pay for advertisements promoting Forexnpower.

Kang and Won were charged with conspiring to commit wire and securities fraud and conspiring to commit money laundering. Kang was also charged with substantive wire fraud.

If convicted of the conspiracies, each faces up to 20 years in prison.

Lead photo via Shutterstock