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Document and Benefit Fraud
02/04/2013

New York man pleads guilty to his role in identity theft ring and tax evasion

NEWARK, N.J. – A New York man pleaded guilty Monday in connection with his role in a large-scale identity-theft scheme. If convicted, he faces 34 years in prison. This case is being investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), FBI, Internal Revenue Service's (IRS) Criminal Investigation and the Bergen County Prosecutor's Office.

Young-Woo Ji, 38, from Bayside, N.Y., pleaded guilty to the charges of conspiracy to commit wire fraud affecting financial institutions and bank fraud, aggravated identity theft and false claims.

According to court documents, Ji conspired with Sang-Hyun Park, aka "Jimmy," and others, to defraud banks, credit card companies and other lenders.

Ji admitted that in Feb. 2008, he traveled to Illinois and used a Social Security card, beginning with the prefix '586' and belonging to a person with the initials F.C., to fraudulently obtain a driver's license. These 586 Social Security numbers were issued by the U.S. to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County that obtained, brokered and sold identity documents to customers to commit credit card fraud, bank fraud, tax fraud and other crimes. Park pleaded guilty Jan. 9 to his role in the enterprise, and is awaiting sentencing.

The criminal enterprise engaged in the fraudulent build-up of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various co-conspirators – members of the enterprise's credit build up teams who received a fee for this service. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build-up teams did not know the real person to whom the identity belonged or virtually any of the customers who had purchased the identities.

After building-up the credit associated with these identities, Park and his co-conspirators directed, coached and assisted the customers in opening bank accounts and obtaining credit cards. Park and his co-conspirators then used these accounts and credit cards to commit fraud. Park relied on several collusive merchants who possessed credit card processing machines. For a fee, known as a 'kkang fee,' these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their kkang fee.

Ji admitted that he used the F.C. identity to fraudulently obtain credit cards. He then used these credit cards, in the name of F.C., to fraudulently build-up credit scores and credit histories for Park's customers who had obtained 586 identities from the criminal enterprise.

Ji also admitted that he used the F.C. identity to establish a merchant account for ZZ Entertainment Inc., a completely fictitious business. By establishing this account, Ji obtained a credit card processing machine and served as a 'collusive merchant' for the criminal enterprise. Ji acknowledged that between Oct. 5 and 20, 2008, he charged $50,000 in fraudulent credit card charges through his ZZ Entertainment Corp. account and then shared portions of this fraud with Park. In total, Ji caused more than $400,000 in financial losses to banks, credit card companies and others.

Ji admitted that he used the 586 identities that he had obtained from Park to file fraudulent tax returns with the IRS. Ji admitted that he used these identities, together with fraudulent Forms W-2, to claim hundreds of thousands of dollars in tax refunds.

Ji's sentencing is scheduled for May 15.