California Department of Corporations Announces Arrest of Robin Kyu Cho of Citi Travelers Insurance Management; Cho Allegedly Defrauded Korean American Clients of $1.9 Million.SACRAMENTO, Calif. -- The California Department of Corporations (DOC) announces the arrest of Robin Kyu Cho, owner of Citi Travelers Insurance Management, a.k.a. Citi Travelers Scholarship Management of Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , for allegedly engaging in an investment scheme by which the defendant defrauded at least 11 members of the Korean American community of approximately $1.9 million. Cho is charged with 118 felony counts including 52 counts of illegal offers and sales of securities, 52 counts of securities fraud and 11 counts of grand theft, among other counts. DOC issued a desist-and-refrain order in January of 2006 against Cho and his companies to prohibit him from selling securities investments and making false and misleading statements. Authorities from the Los Angeles County District Attorney's Office (LADA LADA Larga Distancia (Spanish: Long distance telephone services) LADA Langkawi Development Authority (Malaysia) LADA Laser-Assisted Device Alteration LADA Light Air Defense Artillery ) arrested the defendant during a break in the administrative hearing administrative hearing n. a hearing before any governmental agency or before an administrative law judge. Such hearings can range from simple arguments to what amounts to a trial. There is no jury, but the agency or the administrative law judge will make a ruling. that Cho requested to contest the desist-and-refrain order. The case was originally referred to DOC by the Los Angeles Police Department "LAPD" and "L.A.P.D." redirect here. For other uses, see LAPD (disambiguation).  This article or section is written like an . (LAPD 1. LAPD - Link Access Procedure on the D channel.2. LAPD - Los Angeles Police Department. ). Working jointly, DOC, LAPD and LADA coordinated efforts that led to the filing of criminal charges against Cho. "Today's action demonstrates DOC's commitment to collaborate with law enforcement authorities to prosecute illegal conduct," said Corporations Commissioner Preston DuFauchard. "Hopefully, the actions taken by DOC and the Los Angeles District Attorney's Office will deter anyone considering this type of misconduct in the future." From 1998 through December 2002, DOC alleges that Cho represented himself to be either licensed or failed to disclose that he was not properly licensed. During this period, he solicited financially unsophisticated friends, along with their family members and their friends, to provide funds for an investment in stocks, bonds and commodities which he claimed would yield a 4 to 6 percent monthly return. DOC claims that clients were not informed that they were investing in a Ponzi scheme A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time. : a type of illegal pyramid scheme Pyramid Scheme An illegal investment scam based on a hierarchical setup that relies on new recruits' funding as the source of money, or so-called returns, to be provided to those earlier investors/recruits above them in the pyramid. where money from new investors is used to pay off earlier investors until the whole scheme collapses. Investors were not informed that Cho was investing their pooled funds in financially risky commodity futures, or that he had been losing his own funds since February 1996 and investors' funds from 1998 through September 2002. An arraignment A criminal proceeding at which the defendant is officially called before a court of competent jurisdiction, informed of the offense charged in the complaint, information, indictment, or other charging document, and asked to enter a plea of guilty, not guilty, or as otherwise permitted hearing occurred on June 29 at 8:30 a.m. at the Criminal Courts Building in downtown Los Angeles Downtown Los Angeles is the central business district of Los Angeles, California, located close to the geographic center of the metropolitan area. The sprawling, multi-centered megacity is such that its downtown core is often considered just another district like Hollywood or , Division 50, 5th floor. DOC Counsel Michelle Lipton is responsible for DOC's participation in this case. DOC is California's investment and financing authority and is responsible for the regulation, enforcement, and licensing of investment and financial services, securities, off-exchange commodities, franchises, independent escrows, consumer and commercial finance lending, residential mortgage lending, and payday lenders. Consumers should contact DOC to check on the status of the transaction or investment they are considering and the licensing status of the person who is selling it. Contact DOC's toll-free Consumer Resource Center at 1-866-ASK-CORP (1-866-275-2677) or visit www.corp.ca.gov. |
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