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| INVESTORS OFFSHORE -
NEWS |
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US Investors Scammed Out Of $160 Million By Phony Hedge Fund,
by Carla Johnson, Investors Offshore.com 16 August 2005
It has emerged that hedge fund operators which were being investigated by US
federal investigators have fled the United States, leaving as many as 200 wealthy
clients out of pocket to the tune of $160 million.
KL Financial, based in Palm Beach County, Florida, had been under suspicion
since the Securities and Exchange Commission filed a formal complaint accusing
the firm of misrepresenting the fund's performance and possibly misappropriating
money. A federal court has frozen the company's assets.
However, within 24 hours of a surprise visit to a KL Financial office in California
by SEC investigators in February, Won Lee, a partner in the fund, reportedly
fled to South Korea and investigators have been unable to contact him since.
Another partner, Yung Kim, vanished a day later.
Meanwhile, chief trader, John Kim has remained in Florida and pledged to cooperate
with investigators, although has since asserted his Fifth Amendment right to
avoid self-incrimination to each of 195 questions.
Mike Tein, one of KL's court-appointed receivers, revealed in an Associated
Press report that the three men directly received $20 million during six years
at KL.
The 200 clients of KL, who were mainly men of retirement age, are said to have
lost their entire investments, which could total a sum of $160 million.
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