Bay Area men accused in $85M Ponzi scheme

June 9, 2009 11:24:12 PM PDT
Members of the Bay Area's Korean-American community are the targets of the latest Ponzi scheme investigated by the Securities and Exchange Commission.

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Steve Paik expected to be relaxed and retired by now. Instead, he is surrounded by worry and buried in stacks of papers. They are reminders of the $615,000 he gave to Peter Son and Jin Chung.

"They steal my money," said Paik.

Federal regulators say the founders of SNC Investments were running a Ponzi scheme. Investigators believe the two lured Korean-Americans through newspaper ads promising big returns by trading foreign currency.

"In reality they were trading the investors' money, they were not successful in the forex markets and they were using the money for their own personal expenses," explained Tom Eme with the SEC.

No one answered at Chung's Los Altos home. Neighbors say he disappeared in October.

That is also when Paik stopped getting statements reflecting a nearly $13,000 increase in his account in just one month. Instead, he says, he received a letter from Chung apologizing for the loss of his money.

"I lost all the money, all the savings. I have two kids that go to private college. I don't have any money in my savings account right now, so I am broke," said Paik.

The feds believe 500 victims were swindled out of $80 million in this scheme. They will try to recover what they can.

Meantime, Paik is suing both men in civil court for $1.2 million even though Son is currently in an Oakland jail and Chung is thought to be in Korea.

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