Prosecutors say a man has pleaded guilty after they say he created a fake company and posed as a construction company worker to steal almost $2 million from Appalachian State University in Boone.
The U.S. Department of Justice says Ho Shin Lee of Los Angeles pleaded guilty in federal court to money laundering.
Lee was arrested in California earlier in the year and charged with 14 counts.
According to allegations contained in the indictment, on or about Nov. 18, 2016, Lee applied to the Secretary of State of California to register Royce Hub Trading, Inc. as a corporation in California, claiming that the corporation was in the business “general merchandise.”
Lee represented himself to be the Chief Executive Officer, Secretary, and Chief Financial Officer of Royce Hub Trading. The indictment alleges that on or about Nov. 23, 2016, Lee opened a bank account with a financial institution in Los Angeles in the name of Royce Hub Trading, Inc. Lee claimed to be president of Royce Hub Trading and was the sole account holder.
Court documents indicate that in 2016, Appalachian State University awarded a contract to Rodgers Builders to build a new health sciences building at the university. On or about Dec. 2, 2016, an employee at Appalachian State received an email from an unidentified individual purporting to be D.M., an employee of Rodgers Builders.
The e-mail was sent from firstname.lastname@example.org. The legitimate e-mail address for Rodgers Builders was “rodgersbuilders.com.” The fraudulent e-mail contained a direct deposit form and instructions to change Rodgers Builders’ previously submitted banking information to Lee’s newly opened bank account.
The indictment alleges that the Appalachian State employee changed the payment information as directed by the fraudulent e-mail, and on or about Dec. 8, 2016, a payment of approximately $1,959,925.02 intended for Rodgers Builders by Appalachian State was directed to the bank account controlled by Lee.
According to the indictment, on or about Dec. 12, 2016, Lee received the fraud proceeds, and quickly transferred the funds through a series of financial transactions out of his bank account, knowing that the transactions were designed to conceal the nature, location, source, ownership, and control of the fraud proceeds.
Lee is charged with 14 counts of money laundering. The maximum penalty for the each charge is 20 years in prison and a $ 500,000 fine.
The university has recovered the bulk of the money. On January 24, 2018, U.S. Attorney Murray announced that $1,542,442.33 would be distributed to Appalachian State, following successful civil forfeiture proceedings against money seized from bank accounts controlled by the alleged fraudsters who targeted the university.
Editor’s note: An earlier version of this story located the university on the other side of the state. We regret this error.