A Danville man who lived in the gated Blackhawk community has been sentenced in federal court in Oakland to 15 years in prison for defrauding 500 investors of $62 million. Prosecutors said in court papers that Peter Son, 38, and a business partner “created the classic Ponzi scheme, paying off early investors when needed while continuing to generate income through false advertising.”
Many of the victims were Korean-Americans or Koreans living in California or South Korea, prosecutors said. Assistant U.S. Attorney Stephen Corrigan wrote in a sentencing memorandum that the fraud had a devastating effect on the victims. “Victims report they have lost their life savings, college savings for their children and retirement savings. Victims have had to file for
bankruptcy and others have had to return to work,” Corrigan wrote. Son was sentenced Friday by U.S. District Judge Lowell Jensen, who also ordered him to pay restitution in an amount to be determined in future proceedings. Son pleaded guilty before Jensen in April to one count of conspiracy to commit wire fraud and one count of conspiracy to engage in monetary transactions with the proceeds of wire fraud. Son and his partner, Jin Chung, 46, formerly of Los Altos, promised investors returns of 24 to 36 percent per year in foreign currency trading. Last year, prosecutors said Chung went to South Korea. U.S. Attorney Joseph Russoniello said court records show that the pair engaged in very little foreign exchange trading. Russoniello said Son used some of the funds to pay a $9,000 monthly mortgage for his Blackhawk residence, Blackhawk Country Club dues, and a $3,000 monthly salary for his wife, who allegedly did no work for the investment companies. Prosecutors said the two men’s companies, SNC Asset Management
Inc. and SNC Investments Inc., with headquarters in Pleasanton, took in $85 million from 500 investors between 2003 and 2008.
About $23 million was paid back to investors who either closed their accounts or declined to reinvest the supposed returns, leaving a total loss of $62 million for investors, prosecutors said. Son’s defense attorney, John Feiner of Irvine, was not available for comment today. The U.S. Securities and Exchange Commission filed a civil fraud lawsuit against Son, Chung and the two companies in federal court in San Francisco last year. SEC Regional Director Marc Fagel said that lawsuit is ongoing. Fagel said last year that Son and Chung “placed ads in Korean-language newspapers and used sales agents to target Korean-Americans in typical affinity fraud fashion as they preyed on the trust within close-knit communities.”