FEDERAL WAY, Wash. — A 53-year-old woman from Federal Way pleaded guilty Thursday to a fraud scheme that stole from the Korean community.
Jenni Lee pleaded guilty to three counts of wire fraud and two counts of bank fraud in connection with her phony financial advisor scheme, according to a news release from the U.S. Attorney’s Office.
Lee pretended to be an investment advisor, but the investments actually went into accounts controlled by Lee and were used for her personal expenses.
Lee said she had a gambling addiction and used other people’s money for gambling.
Federal Way woman took more than $3 million in fraud scheme
The FBI investigation revealed she defrauded at least 28 victims of more than $3 million. Many were elderly and relied on the money for retirement.
Lee created various business entities with names that made it look as though they were financial investment companies, according to records filed in the case. She opened and controlled bank accounts for the shell companies.
Lee told the victims she was a financial advisor at the shell companies. She claimed she would put the victims’ investments in funds that would guarantee a return, sometimes as high as 10%.
“Lee got the victims to write checks to one of the shell companies for ‘investment,’ or she induced the client to fund a self-directed IRA at a legitimate financial services company and to then give Lee access to manage the account,” the attorney’s office stated. “Lee would sometimes provide the financial services company with a promissory note to make it appear the client was loaning money to one of Lee’s shell companies. In this way she gained control of the investor funds.”
In all, Lee took more than $3 million, but some of the money was paid back to investors in the style of a Ponzi scheme, which made the actual loss amount around $1.5 million.
Authorities noted, of that money, at least $900,000 was spent at casinos.
Lee’s charges are punishable by up to 30 years in prison. Her sentencing is scheduled for Sept. 18.
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