Brian Kim, a former hedge-fund manager accused of running a $6 million Ponzi scheme, was offered six to 18 years in prison by prosecutors in exchange for a guilty plea to grand larceny and related charges.
Kim was taken into custody this year by authorities in Hong Kong, where he had fled before a U.S. trial scheduled to begin in January on charges that he stole $430,000 from a Manhattan condominium complex where he lived.
He was indicted again in February and charged with running a Ponzi scheme at his firm, Liquid Capital Management LLC, from January 2003 to January 2011. He returned to the U.S. in October and pleaded not guilty to grand larceny and bail jumping.
Kim hasn’t decided whether to accept the Manhattan district attorney’s offer, which would resolve all three of the state cases against him, his lawyer, Justin Levine, said today after a hearing before Justice Charles Solomon of the New York State Supreme Court Judge. His client may face as long as 45 years in prison if convicted of all the charges, Levine said.
Kim plans to plead guilty next week in federal court in Manhattan to passport-fraud charges that carry a maximum sentence of a year in prison, Levine said. U.S. prosecutors accused Kim of lying to officials in New York to obtain a new passport by saying he had lost his, which he had surrendered as part of the 2009 condo case, Levine said.
Manhattan prosecutors said Kim told his clients they were investing in safe and stable securities while he generated losses trading highly speculative futures contracts and diverted customer money to himself. He created fake monthly performance statements to conceal the scheme from at least 45 victims, the government said.
Kim and his employees told prospective clients the fund generated returns of more than 240 percent, and they hid losses by making new investments look like profits, the U.S. Commodity Futures Trading Commission said in a civil suit.
Shopping trips in New York, skiing in Vermont and excursions to Atlantic City, New Jersey, were funded by improper withdrawals from the fund, the CFTC said. Kim “is the sole and managing member” of the New York-based company, the agency said in its complaint, filed in February.
Kim is being held without bail. His next state court date is Jan. 13.
The state case is People v. Kim, 2011/86, New York State Supreme Court, New York County (Manhattan). The CFTC suit is U.S. Commodity Futures Trading Commission v. Kim, 11-cv-01013, and the federal criminal case is U.S. v. Kim, 11-cr-00642, U.S. District Court, Southern District of New York (Manhattan.)
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