Preet Bharara, the United States Attorney for the Southern District of New York, David Schnorbus, Special Agent-in-Charge of the New York Field Office of the United States Department of State, Diplomatic Security Service (“DOS-DSS”); Angel M. Melendez, the Special Agent in Charge of the Department of Homeland Security, Homeland Security Investigations, New York Field Office (“HSI”); Shantelle P. Kitchen, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation (“IRS-CI”); and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS” and together with DSS, HSI, and the IRS, the “Investigating Agencies”), announced charges today against 11 individuals, RYAN JUNGHUN KIM, a/k/a “Ryan Junghun Choi,” a/k/a “Ki Soo Choi,” a/k/a “Lion King,” HOI HAM, SUNG HWAN KIM, a/k/a “Sean Kim,” YOUNG HO JOO, a/k/a “Jay Joo,” MI SOOK KIM, SU YEON YUN, a/k/a “Bebe,” HYUN JOO LEE, HYUN JOO SHIN, YING AI LI, a/k/a “Sung Soon Kim,” JIN AE JUNG, a/k/a “Jaqueline Kim,” a/k/a “Jackie Kim,” and MOOJA PETERSON, a/k/a “MJ,” for laundering in excess of $1.4 million in illegal proceeds between 2011 and 2016. These illegal proceeds were generated by at least 10 illegal brothels in and around the New York City metro area that the defendants owned, operated, managed, or advertised.
HOI HAM, YOUNG HO JOO, SU YEON YUN, HYUN JOO SHIN, YING AI LI, and JIN AE JUNG and were arrested in the New York City metro area today. SUNG HWAN KIM was arrested in Pennsylvania today. These defendants will be presented in the Southern District of New York today before United States Magistrate Judge James L. Cott. RYAN JUNGHUN KIM was arrested in Seoul, South Korea. MI SOOK KIM, MOOJA PETERSON, and HYUN JOO LEE have not yet been apprehended.
Manhattan U.S. Attorney Preet Bharara said: “Eleven individuals are charged with laundering more than a million dollars of proceeds from their illegal commercial sex businesses. I want to thank our federal and local law enforcement partners and recognize the assistance of the Seoul Metropolitan Police Agency.”
Special Agent-in-Charge David Schnorbus said: “The dismantling of this international conspiracy, stretching from South Korea to the United States, is an important achievement made possible by the coordinated efforts of all agencies supporting this investigation and prosecution. Diplomatic Security’s global presence enables our organization to partner with foreign law enforcement, and the investigative support of the Seoul Metropolitan Police Agency highlights that global reach.”
Special Agent in Charge Angel M. Melendez said: “Today's arrests and search warrants are the result of the great partnership between HSI and its law enforcement partners to shut down a large international prostitution and money laundering organization operating illegal brothels here in New York. Sex businesses like these pose a threat to public safety in our communities and must not be tolerated.”
Special Agent in Charge Shantelle P. Kitchen said: “Money laundering is not just a crime committed by drug dealers. The kinds of criminal enterprises that launder money to conceal illicit proceeds and to keep their operations going are as diverse as the ways that money can be laundered. IRS-Criminal Investigation is always ready to bring its financial investigative expertise to money laundering investigations of all kinds.”
Inspector-in-Charge Philip R. Bartlett said: “These individuals operated an illegal prostitution ring, lining their pockets with the profits from the world’s oldest profession. Today's arrests are yet another example of law enforcements commitment to identify, disrupt and dismantle organized criminal enterprises.”
According to the Complaint[1] unsealed today in Manhattan federal court:
Since 2012, the Investigating Agencies have been investigating a group of brothels (the “Brothels”) operating in and around New York. Each of the Brothels is independently owned and operated, but the owners of the Brothels work cooperatively through, among other things, the sharing of approved customer lists and information. Defendants RYAN JUNGHUN KIM, HOI HAM, SUNG HWAN KIM, YOUNG HO JOO, MI SOOK KIM, SU YEON YUN, HYUN JOO LEE, HYUN JOO SHIN, YING AI LI, JIN AE JUNG, and MOOJA PETERSON are individuals who operated the Brothels, including advertisers, website developers, brothel owners, and brothel managers.
The defendants typically used websites associated with the Brothels to advertise the women prostituted in the Brothels (the “Brothel Websites”). The Brothel Websites describe, among other things, specific services that the Brothels offer, including a service called the “girlfriend experience.” In addition to the Brothel Websites, the Brothels used an online aggregator of advertisements to advertise the Brothels (the “Advertising Website”). The management of online advertising and payment for this advertising was coordinated by the defendants. The defendants would regularly email among themselves sexually explicit photographs of women prostituted in the Brothels to be used in online advertising, as well as instructions for how certain posts should appear. They would also exchange emails concerning, among other things, advertising for the Brothels and payment of advertising fees to the Advertising Website.
To pay for these advertising fees, the defendants would use hundreds of thousands of dollars in illegal proceeds generated by the Brothels’ prostitution business. These proceeds would be transferred among the defendants through several methods, including cash deliveries, payment of credit card balances, and wire transfers. An account associated with RYAN JUNGHUN KIM received tens of thousands of dollars from accounts in the names of several of the defendants. HOI HAM, the defendant, made cash pickups from the Brothels on multiple occasions, and even discussed these pickups in electronic chat messages with RYAN KIM. Moreover, between December 2012 and May 2014, approximately $326,381 was transferred from a single credit card in HAM’s name to the Advertising Website. Similarly, between December 2011 and September 2013, approximately $150,000 in cash was deposited into an account in the name of SUNG HWAN KIM and approximately $90,000 during that same period was remitted to the Advertising Website. Finally, between December 2011 and May 2014, approximately $268,000 was deposited into a bank account maintained in the name of YOUNG HO JOO, the defendant, and another individual. During this same period, this account remitted approximately $92,311 to the Advertising Website. To date, the investigation, which is ongoing, has identified more than $1.4 million worth of illegal transactions.
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Each of the defendants is charged with one count of conspiracy to commit money laundering, which carries of maximum sentence of 20 years in prison; and one count of conspiracy to violate the Travel Act, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html
Mr. Bharara praised the outstanding efforts of DSS, HSI, the IRS, USPIS, the New York City Police Department, and the Seoul Metropolitan Police Agency. He added that the investigation is ongoing.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Sidhardha Kamaraju, Lauren Schorr, and Michael Neff are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.