1/10/2017

FourIndividualsChargedInForeignBriberyAndFraudSchemeInvolvingPotential$800MillionInternationalRealEstateDealForSouthKoreanC...

U.S.AttorneysSouthernDistrictofNewYorkNewsPressReleases
DepartmentofJustice
U.S.AttorneysOffice
SouthernDistrictofNewYork
FORIMMEDIATERELEASE

Tuesday,January10,2017

FourIndividualsChargedInForeignBriberyAndFraud
SchemeInvolvingPotential$800MillionInternationalReal
EstateDealForSouthKoreanCompany
DefendantsAttemptedtoPay$2.5MillioninBribestoFacilitateaSouthKorean
CompanysSaleoftheLandmark72BuildinginHanoi,Vietnam,theTallestBuilding
intheIndochinaPeninsulaattheTime

PreetBharara,theUnitedStatesAttorneyfortheSouthernDistrictofNewYork,LeslieR.
Caldwell,AssistantAttorneyGeneraloftheCriminalDivisionoftheU.S.Departmentof
Justice,StephenRichardson,AssistantDirectoroftheCriminalInvestigativeDivisionofthe
FederalBureauofInvestigation(FBI),andWilliamF.SweeneyJr.,AssistantDirectorin
ChargeoftheNewYorkFieldOfficeoftheFBI,announcedtheunsealingofanIndictment
chargingJOOHYUNBAHN,a/k/aDennisBahn(BAHN),BANKISANG(BAN),and
MALCOLMHARRIS(HARRIS)withviolationsoftheForeignCorruptPracticesAct
(FCPA),moneylaundering,wirefraud,andaggravatedidentitytheft,andthefilingofa
ComplaintchargingSANGWOO,a/k/aJohnWoo,withconspiracytoviolatetheFCPA.
Thedefendantsarechargedwithfederalcrimesarisingoutofacorruptschemetopay$2.5
millioninbribestoaforeignofficial(ForeignOfficial1)ofacountryintheMiddleEast
(Country1)inordertofacilitatethesalebySouthKoreanconstructioncompany
KeangnamEnterprisesCo.,Ltd.(Keangnam)ofa72storycommercialbuildingknownas
Landmark72inHanoi,Vietnam,toCountry1ssovereignwealthfund(theFund)for$800
million.

ManhattanU.S.AttorneyPreetBhararasaid:Thefathersondefendants,BanKiSangand
JooHyunBahn,allegedlyconspiredtobribeaforeignofficialtoclosean$800milliondeal
fora72storyskyscraperinVietnam,adealthatwouldhaveledtoamultimilliondollar
commissionfortheManhattanrealestatebrokersonandmuchneededcapitalforthe
fathersconstructioncompanyinKorea.Buttheseallegedschemerswerethemselves
doublecrossed,asthemanwhopurportedlysetupthebriberyscheme,MalcolmHarris,
tookthebribemoneyandpocketedit.Thisallegedbriberyandfraudschemeoffendsall
whobelieveinhonestandtransparentbusiness,anditstandsasareminderthatthosewho
bringinternationalcorruptiontoNewYorkCity,asallegedhere,willfacethescrutinyof
Americanlawenforcement.

AssistantAttorneyGeneralLeslieR.Caldwellsaid:Thisallegedconductprovestheadage
thatthereistrulynohonoramongthieves.Theindictmentallegesthattwodefendants
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wantedtobribeagovernmentofficialinsteadtheyweredefraudedbytheircodefendant.
TodayschargesareanotherexampleoftheCriminalDivisionscommitmenttorootingout
allmannerofcorruption.

FBIAssistantDirectorStephenRichardsonsaid:Acceptingandofferingbribesseriously
threatenstheintegrityofafairandcompetitiveeconomicsystemhereintheUnitedStates
andabroad.ThiscaseisatestamenttothecommitmentbytheFBIandourdedicated
InternationalCorruptionSquadstocombattingforeigncorruptionthatreachesourshores,
andthesearrestssendastrongmessagethatwewillnotrelentinoureffortstoupholdthe
lawandholdeveryoneaccountabletoplaybythesame,fairrules.

FBIAssistantDirectorWilliamF.SweeneyJr.said:WhenBan,aseniorexecutiveat
Keangnam,realizedthedebtsowedtohiscompanyscreditorsweremounting,hesought
thesupportofhissonBahn,abrokerforarealestatefirminManhattan.Theplanwasfor
BahntosecureaninvestorforLandmark72,andthebrokerageagreementtheyentered
intowouldultimatelysecureBahnalucrativeprofit.Butinsteadoflawfullyobtaining
financingforthedeal,theyallegedlyenteredintoanillegalagreementwithHarristobribea
foreignofficialintopurchasingtheproperty.Intheend,theywerehoodwinkedbytheirvery
owncriminalactivity.

AccordingtotheallegationscontainedintheIndictmentandtheComplaint[1]:

FrominoraboutMarch2013throughinoraboutMay2015,BAHNandhisfatherBAN
engagedinaninternationalconspiracytobribeForeignOfficial1inconnectionwiththe
attempted$800millionsaleofabuildingcomplexinHanoi,Vietnam,knownasLandmark
72.Duringthistime,BANwasaseniorexecutiveatKeangnam,aSouthKorean
constructioncompanythatbuiltandownedLandmark72.Inearly2013,Keangnamwas
experiencingaliquiditycrisis.ThedebtsowedtoKeangnamscreditorswerematuringand
thecompanyneededtoraisecapital.BANconvincedKeangnamtohirehissonBAHN,who
workedasabrokeratacommercialrealestatefirminManhattan,tosecureaninvestorfor
Landmark72.Thereafter,Keangnamenteredintoanexclusivebrokerageagreementwith
BAHNandhisfirm.IfBAHNweresuccessful,hestoodtoearnamultimilliondollar
commissionfromKeangnam.
Insteadofobtainingfinancingthroughlegitimatechannels,BAHNandBANengagedina
corruptschemetopaybribestoForeignOfficial1,throughHARRIS,whoheldhimselfout
asanagentofForeignOfficial1,toinduceForeignOfficial1tousehisinfluenceto
convincetheFundtoacquireLandmark72forapproximately$800million.HARRISsent
BAHNnumerousemailspurportedlysentbyForeignOfficial1andbearingForeignOfficial
1sname.InoraboutApril2014,followingcommunicationswithHARRIS,BAHNandBAN
agreedtopay,throughHARRIS,a$500,000upfrontbribeanda$2,000,000bribeuponthe
closeofthesaleofLandmark72toForeignOfficial1onbehalfofKeangnam.WOOhelped
BAHNandBANobtainthe$500,000thatwasultimatelyusedtopaytheattemptedupfront
bribe.UnbeknownsttoBAHNorBAN,however,HARRISdidnothavetheclaimed
relationshipwithForeignOfficial1anddidnotintendtopaythebribemoneytoForeign
Official1.Instead,HARRISsimplystolethe$500,000upfrontbribearrangedbyBAHNand
BAN,whichHARRISthenspentonlavishpersonalexpenses,includingrentforaluxury
penthouseapartmentinWilliamsburg,Brooklyn.

Overapproximatelythenextyear,astheLandmark72dealshowednosignsofactual
progress,Keangnamsliquiditycrisisworsened.BelievingthattheupfrontbribethatBAHN
andBANhadarrangedwouldeventuallybearfruit,andnotwantingtoloseapotential
multimilliondollarcommission,BAHNengagedinafraudulentschemetotrickKeangnam
anditscreditorsintobelievingtheFundwasclosetoacquiringLandmark72.BAHNalso
stoleapproximately$225,000ofthe$500,000thatKeangnamhadadvancedBAHNsfirm
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tocoverbrokerageexpenses.Infurtheranceofthefraudulentscheme,BAHNrepeatedly
liedtoKeangnamanditscreditorsaboutthestatusoftheLandmark72dealwiththeFund,
knowingthatKeangnamanditscreditorswouldrelyuponthemisrepresentations.In
addition,BAHNforgedemailsfromForeignOfficial1andotherdocumentstomakethesale
ofLandmark72totheFundappearimminenttoKeangnamanditscreditors.Ultimately,
whenthesaleofLandmark72totheFundfailedtomaterialize,Keangnamwasforcedto
entercourtreceivershipinSouthKorea.

***
BAHNwasarrestedinTenafly,NewJersey,andWOOwasarrestedatJohnF.Kennedy
Airportearlierthismorning.BAHNandWOOareexpectedtobepresentedbeforeU.S.
MagistrateJudgeKevinNathanielFoxinfederalcourtinManhattanlatertoday.BANand
HARRISarecurrentlyatlarge.

ThecaseagainstBAHN,BAN,andHARRISisassignedtoU.S.DistrictJudgeEdgardo
Ramos.

BAHN,38,ofTenafly,NewJersey,andBAN,69,ofSeoul,SouthKorea,areeachcharged
withonecountofconspiracytoviolatetheFCPA,whichcarriesamaximumsentenceoffive
yearsinprisonthreecountsofviolatingtheFCPA,eachofwhichcarriesamaximum
sentenceoffiveyearsinprisonandonecountofconspiracytocommitmoneylaundering
andonecountofmoneylaundering,eachofwhichcarriesamaximumsentenceof20
yearsinprison.Inaddition,BAHNandHARRIS,52,ofNewYork,NewYork,areeach
chargedwithonecountofwirefraud,whichcarriesamaximumsentenceof20yearsin
prisononecountofconductingmonetarytransactionsinillegalfunds,whichcarriesa
maximumsentenceof10yearsinprisonandaggravatedidentitytheft,whichcarriesa
mandatoryconsecutivesentenceoftwoyearsinprison.WOO,35,ofEdgewater,New
Jersey,ischargedwithonecountofconspiracytoviolatetheFCPA,whichcarriesa
maximumsentenceoffiveyearsinprison.

ThemaximumpotentialsentencesareprescribedbyCongressandareprovidedherefor
informationalpurposesonly,asanysentencingsofthedefendantswillbedeterminedby
thejudge.
Mr.BhararapraisedtheoutstandinginvestigativeworkoftheInternationalCorruption
SquadoftheFBIsNewYorkFieldOffice.Mr.BhararaalsothankedtheDepartmentof
JusticesOfficeofInternationalAffairsforitsongoingassistanceinthisinvestigation.

ThecaseisbeingprosecutedbytheOfficesComplexFraudsandCybercrimeUnit.
AssistantUnitedStatesAttorneyDanielS.NobleandTrialAttorneyDennisR.Kihmofthe
FraudSectionoftheJusticeDepartmentsCriminalDivisionareinchargeofthe
prosecution.

ThechargescontainedintheIndictmentaremerelyaccusations,andthedefendantsare
presumedinnocentunlessanduntilprovenguilty.

[1]Astheintroductoryphasesignifies,theentiretyofthetextoftheIndictmentandComplaint,andthe

descriptionoftheIndictmentandComplaintsetforthherein,constituteonlyallegations,andeveryfact
describedshouldbetreatedasanallegation.
17007
USAONewYork,Southern
UpdatedJanuary10,2017
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