Brian Kim

Brian Kim
Born 1975/1976 (age 39–40)
New Jersey
Residence Christodora House, East Village, Manhattan
Nationality American
Other names Bu Yung Kim
Occupation former hedge fund manager
Known for Ponzi scheme
Criminal charge
 pleaded guilty to charges including passport fraud, grand larceny, scheme to defraud, violation of the NY General Business Law (Martin Act), and falsifying business records
Criminal penalty
 5 years, 7 months, to 15 years, 7 months in prison
Criminal status Incarcerated
Capture status
 Arrested
Time at large
 10 months

Brian Kim (also known as "Bu Yung Kim"; born 1975–1976) is a former hedge fund manager.[1][2][3] He founded the now-defunct Liquid Capital Management LLC, which focused on futures trading.

In 2011, the Commodity Futures Trading Commission charged him with fraudulent solicitation, misappropriation, and misrepresentation to investors and regulatory organizations, and sought an injunction preventing him from trading in commodities futures and foreign currencies. He was found guilty of all charges, a default judgment of $12.5 million was entered against him, and he was banned from future commodity trading.

In 2012, he pleaded guilty to charges including passport fraud, grand larceny, scheme to defraud, violation of the NY General Business Law (Martin Act), and falsifying business records to further a Ponzi scheme. He was sentenced to 5 years, 7 months, to 15 years, 7 months in prison.

Early career

Kim was born in New Jersey.[1] He graduated from Dartmouth College in 1997, where he had majored in economics and minored in art history.[4][5]

He founded the now-defunct Liquid Capital Management LLC, which focused on futures trading, in 2002 and had an office on Broadway in New York City.[5][2][6][7]

In 2009, Kim twice appeared on CNBC's financial television news show Squawk Box, speaking as an expert about derivatives trading.[2][8][7][9] In August 2009 he spoke on why Korean equities were sought as an investment, and in November 2009 he spoke on CNBC Asia about "dark pools", and the legality of the markets.[10][11][12][13][14]

Christodora House charges

Kim had owned and lived in an apartment at Christodora House in the East Village in Manhattan.[2][6] He was indicted and arrested in 2009, and accused of stealing $435,000 from the Christodora House condo association in June 2008.[5][2][3][9] Kim allegedly falsified documents identifying himself as the president-secretary of the condo association, and then transferred $435,000 from the association’s bank account to a bank account he set up for Liquid Capital, and then depleted all the money he had stolen.[2]

Flight and arrest

On the eve of his Christadora House trial in January 2011, Kim fled to Hong Kong using a fraudulently obtained U.S. passport.[6][3] He failed to appear at his trial, and was charged with jumping bail.[2]

He was taken into custody ten months later in October 2011 by authorities in Hong Kong, and was returned to the United States.[6][3]

Ponzi scheme charges and default judgment

After an investigation by the Commodity Futures Trading Commission (CFTC) into his hedge fund business, in February 2011, Kim was charged both civilly and criminally with financial fraud, grand larceny, and scheme to defraud for running a $6 million Ponzi scheme from January 2003 through January 2011, and cheating at least 45 investors from the West Coast while providing them with fake monthly performance statements.[2][3][9] According to prosecutors, he told his clients they were investing in safe and stable securities, while in fact he traded in highly speculative contracts and diverted money to himself.[6]

The CFTC sued Kim and Liquid Capital in February 2011, charging them with fraudulent solicitation, misappropriation, and misrepresentation to investors and regulatory organizations, and seeking an injunction preventing them from trading in commodities futures and foreign currencies.[6][15] The agency said Kim and his employees told clients that Liquid Capital generated returns of more than 240 percent, while in fact they hid losses by making new investments look like profits.[6][3]

In April 2011, Judge Denise Cote of the U.S. District Court for the Southern District of New York found the defendants guilty of all charges. She entered a default judgment of $12.5 million (three times Kim’s gain of $3.1 million) against him in the CFTC suit, and he and Liquid Capital were banned from future commodity trading.[6] In addition, the court froze his assets.[2][15]

Guilty pleas and sentencing

In March 2012, he pleaded guilty to passport fraud in federal court in Manhattan, by lying to officials to obtain a passport by saying his was lost, after prosecutors had confiscated his passport.[3][7] He was sentenced in April 2012 to 14 months in prison, a portion of which was to run consecutive with his sentencing for his Ponzi scheme.[6][7]

On March 16, 2012, Kim pleaded guilty to 9 of 26 counts against him, including grand larceny, scheme to defraud, violation of the NY General Business Law (Martin Act), and falsifying business records in connection with the Ponzi scheme charge, and stealing $435,000 from the Christadora House.[16][6][17] He faced as many as 25 years in prison for the most serious count.[6] In April 2012, Kim was sentenced by Justice Charles H. Solomon in New York State Supreme Court in Manhattan to 5 to 15 years in prison.[6]

Kim was to serve 7 months in federal prison on his fraud conviction, and then serve his 5-to-15-year sentence in state prison.[7]

References

  1. ↑ 1.0 1.1 Karen Freifeld (March 16, 2012). "Fugitive hedge fund manager pleads guilty". WDEZ. Retrieved October 13, 2014.
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 Kaja Whitehouse (February 17, 2011). "Manhattan hedge funder charged with $4M Ponzi scheme may be on lam in Italy". New York Post. Retrieved October 13, 2014.
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 Chris Dolmetsch and Tiffany Kary (November 4, 2011). "Liquid Capital's Brian Kim Pleads Not Guilty to Hedge-Fund Ponzi Charges". Bloomberg. Retrieved October 13, 2014.
  4. ↑ "NY Investor Charged With Running $4M Ponzi Scheme". Fox Business. February 15, 2011. Retrieved October 13, 2014.
  5. ↑ 5.0 5.1 5.2 Lindsay Brewer (February 23, 2011). "Fugitive alum. indicted for fraudulent operation". The Dartmouth. Retrieved October 13, 2014.
  6. ↑ 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 Chris Dolmetsch and David Glovin (April 20, 2012). "Hedge Fund Founder Kim Gets Five to 15 Years for Scheme". Business Week. Retrieved October 13, 2014.
  7. ↑ 7.0 7.1 7.2 7.3 7.4 "Hedge fund manager sentenced for Ponzi scheme". Reuters. April 20, 2012. Retrieved October 13, 2014.
  8. ↑ Nitasha Tiku (February 17, 2011). "Hedge Fund Ponzi Schemer Has Surprisingly Lowbrow Appetites". Daily Intelligencer. Retrieved October 13, 2014.
  9. ↑ 9.0 9.1 9.2 Melissa Grace (February 15, 2011). "CNBC pundit and hedge-fund operator at heart of $4 million Ponzi scheme". NY Daily News. Retrieved October 13, 2014.
  10. ↑ Katya Wachtel (February 16, 2011). "This CNBC Asia Guest Is Accused Of Running A Ponzi Scheme, And He's On The Run". Business Insider. Retrieved October 13, 2014.
  11. ↑ "Growth in Asian Derivatives". CNBC. August 25, 2009. Retrieved October 13, 2014.
  12. ↑ "Getting to the Bottom of Dark Pools". CNBC. November 9, 2009. Retrieved October 13, 2014.
  13. ↑
  14. ↑ Hilary Russ (February 15, 2011). "Fugitive Fund Manager Charged In $4M Ponzi Scheme". Retrieved October 13, 2014.
  15. ↑ 15.0 15.1 CFTC Release: pr6028-11; New York Federal Court Orders Brian Kim and Liquid Capital Management, LLC, to Pay More than $12 Million in Restitution and Monetary Sanctions for Commodity Pool Fraud; Defendants were indicted by a New York County Grand Jury in February 2011. April 21, 2011
  16. ↑ "DISTRICT ATTORNEY VANCE ANNOUNCES GUILTY PLEA OF BRIAN KIM IN $6 MILLION PONZI SCHEME AND 2009 GRAND LARCENY CASE". The New York County District Attorney's Office. March 16, 2012. Retrieved October 13, 2014.
  17. ↑ "Ex-NY hedge fund head who fled admits $4M swindle; Former Liquid Capital Management manager Brian Kim admitted to stealing more than $4 million from investors and hundred of thousands of dollars from his condominium board.". Crain's New York Business. March 16, 2012. Retrieved October 13, 2014.

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