(CN) – Two California men stand accused of running an $80 million Ponzi scheme that targeted Korean-Americans. The SEC said Tuesday that the men bamboozled 500 investors in the United States, South Korea and Taiwan with false promises of 36 percent annual returns from foreign currency trading.
Peter C. Son, of Danville and Jin K. Chung, of Los Altos used the money to pay off early investors – the hallmark of a Ponzi scheme – and spent it on themselves – including mortgage payments on Son’s multimillion-dollar home and salary for his wife, though she did no work, the SEC says in its complaint in San Francisco Federal Court.
Son and Chung operated through SNC Asset Management, and SNC Investments, which had offices in Pleasanton, Calif., and New York City, according to the complaint.
Son and Chung allegedly told investors that SNC had generated 50 percent profits from forex trading each year since 2003, and supported their claims with bogus account statements.
When their scheme began to collapse, the SEC alleges, Son and Chung drained SNC’s accounts and transferred the money to overseas accounts. The SEC seeks emergency relief, disgorgement and penalties.