IN THE COURTS
California man pleads guilty to
$1.9 million Appalachian State
University construction invoice fraud
North Carolina Construction News staff writer
Prosecutors say a man has
pleaded guilty after he created a fake
company and posed as a construc-
tion 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
pled guilty in federal court to money
laundering. Lee was arrested in California ear-
lier in the year and charged with 14
counts. According to allegations con-
tained in the indictment, on or about
Nov. 18, 2016, Lee applied to the
Secretary of the State of California to
register Royce Hub Trading, Inc. as a
California corporation, claiming that
it was in the business “general mer-
chandise.” 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 Los
Angeles financial institution in the
name of Royce Hub Trading, Inc. Lee
claimed to be president of Royce
Hub Trading and was the sole ac-
count holder.
Court documents indicate that in
2016, Appalachian State University
awarded a contract to Rodgers
Builders to build a new health sci-
ences building. 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 ac-
counts@rodgersbuildersinc.com. The legitimate e-mail address for
Rodgers Builders was “rodgers-
8 — Summer 2018 — The North Carolina Construction News
Architect’s rendering of the Appalachian
Beaver College of Health Sciences building,
under construction by Rodgers Builders
builders.com.” The fraudulent e-mail
contained a direct deposit form and
instructions to change Rodgers
Builders’ previously submitted bank-
ing 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 pay-
ment of approximately $1,959,925.02
intended for Rodgers Builders by Ap-
palachian State was directed to the
bank account controlled by Lee.
According to the indictment, on or
about Dec. 12, 2016, Lee received
the fraudulent proceeds, and quickly
transferred the funds through a se-
ries of financial transactions out of
his bank account, knowing that the
The accident scene in 2015 (WRAL-TV)
transactions were designed to con-
ceal the nature, location, source,
ownership, and control of the
money. Lee was 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 Jan. 24 this
year, U.S. Attorney Murray an-
nounced 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 fraudster.
Three companies to pay $84,000 in
fines for 2015 Raleigh scaffolding
accident Three companies will pay a total
of $84,000 in fines for violations re-
lated to a deadly 2015 scaffolding ac-
cident in Raleigh that killed three
workers and seriously injured a
fourth. The state levied the biggest fine
against Associated Scaffolding for
the most serious violations. The fines
were initially set at $152,000, but the
company challenged the penalty and
a judge reduced the amount owed to
$70,000. The other companies, Jannawall
and Juba Aluminum, each paid their
$4,200 fines but, as part of the set-
tlement, the labor department
changed the violation from serious to
“other.” Jose Erasmo Hernandez, 41, and
Anderson Almeida, 33, of Durham,
with Jose Luis Lopez-Ramirez, 33, of
Clinton, fell to their deaths March 23,
2015, at the Charter Square con-
struction site at South and Fayet-
teville streets. Elmer Guevara, 53,
was treated for serious injuries.
While the safety violation case
has been closed, a lawsuit is still
pending by Guevera and the three
victims' families against several com-
panies associated with the project.
That lawsuit alleges general con-
tractor Choate Construction rushed
the scaffold dismantling, which
forced Associated Scaffolding, Inc.
to load sections of the scaffolding as
it was taken down onto the platform
with the workers. The platform was
supposed to hold no more than
2,500 pounds, but it was carrying
more than 4,200 pounds when it fell,
the lawsuit asserts.
The men, and part of the platform
they were standing on, fell several
stories when one of the tracks
snapped off the scaffold while it was
being dismantled, according to pub-
lished reports.
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chase@ncconstructionnews.com The North Carolina Construction News — Fall 2018 — 9