CHARLOTTE — Two years after a Los Angeles man used an email scam to launder more than $1.9 million stolen from Appalachian State University, he pleaded guilty to money laundering in U.S. District Court in the Western District of N.C.
Court documents indicate that in 2016, App State awarded a contract to Rodgers Builders to build a new health sciences building at the university. On or about Dec. 2, 2016, an employee at the university received an email from a person purporting to be an employee of Rodgers Builders, and requested the university employee to change the payment information to a different account.
The fraudulent email contained a direct deposit form and instructions to change Rodgers Builders’ previously submitted banking information to a newly opened bank account. Court documents state that on or about Dec. 8, 2016, a payment of approximately $1,959,925.02 intended for Rodgers Builders by App State was directed to the bank account controlled by Ho Shin Lee.
Lee was arrested in California in spring 2018 — he was 31 years old at the time. He was indicted on 14 counts with 13 of these dismissed in U.S. District Court after he entered his guilty plea in August 2018, according to court documents.
Lee was sentenced on Feb. 19 to three years and one month in prison, required to pay $1,959,925.02 in restitution to App State and placed on supervised release for one year upon release from imprisonment. Court documents state that some of the conditions of Lee’s supervision include participating in a gambling addiction treatment program as well as being surrendered to immigration officials for deportation.
The court recommended to the Bureau of Prisons that Lee be placed in a facility close to Taft Correctional Institution or Federal Correctional Institution Lompoc — both are located in California.
“Appalachian appreciates the work by the U.S. Attorney’s Office and Federal Bureau of Investigation in this case,” according to App State spokesperson Megan Hayes.
According to the indictment documents, sometime in November 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 of “general merchandise.” The indictment states that in the same month Lee opened a bank account with a financial institution in Los Angeles in the name of the corporation — of which Lee claimed to be the president and the sole account holder.
The following month is when Lee received the fraud proceeds, and quickly transferred the funds through a series of financial transactions out of his bank account, according to the indictment. He did so knowing that the transactions were designed to conceal the nature, location, source, ownership and control of the fraud proceeds, the indictment states.
R. Andrew Murray, U.S. attorney for the Western District of North Carolina, announced in January 2018 that $1,542,442.33 would be distributed to App State, following successful civil forfeiture proceedings against money seized from bank accounts controlled by the alleged fraudsters. The current total amount of money App State has received from the incident since that time was unknown as of presstime on March 14.