A federal jury in San Francisco has found Douglas Jae Woo Kim, a 32-year-old from New York, guilty of multiple counts including wire fraud and money laundering. The verdict was delivered after a three-week trial overseen by Senior U.S. District Judge Charles R. Breyer.
Court documents and trial evidence revealed that between October 2017 and June 2020, Kim executed a scheme to defraud investors out of over $7 million. He misrepresented himself as a legitimate cryptocurrency trader seeking loans or investments for trading purposes. Kim assured investors of low risk and high returns while falsely claiming he could personally guarantee the loans.
"This case may involve the new world of virtual currency, but there’s nothing new about the defendant’s scheme to defraud," stated Acting United States Attorney Patrick D. Robbins. "Douglas Kim made bogus promise after promise to investors and lenders, only to cheat them and send their money to offshore gambling sites."
FBI Acting Special Agent in Charge Dan Costin remarked, "Mr. Kim deceived those who trusted him, exploiting their confidence to fund his personal gambling activities rather than the legitimate investments he offered his victims."
Kim began contacting potential victims in October 2017, offering what he described as short-term loans for a cryptocurrency operation with supposed low risk. Instead of investing these funds as promised, Kim transferred substantial amounts to bitcoin sports betting sites outside the U.S., amassing over $1 million from one victim alone.
In another instance in November 2017, Kim obtained a cryptocurrency loan worth approximately $186,000 under false pretenses and redirected all funds to offshore betting sites. He also engaged another victim in January 2018 for an investment valued at around $200,000 but again used the majority of funds for gambling purposes.
Kim continued defrauding individuals until July 2020 when charged by federal complaint. Despite being on pretrial release in 2023, he allegedly attempted to renew his fraudulent activities; charges related to this period remain pending.
While acquitted of one count of international money laundering, Kim faces up to 20 years imprisonment for each count of wire fraud and international money laundering and up to 10 years for each count of money laundering. Sentencing will consider U.S. Sentencing Guidelines and federal statutes.
Assistant U.S. Attorneys Noah Stern and Maya Karwande are prosecuting with support from Veronica Hernandez, Maryam Beros, Andy Ding, Lynette Dixon, and Christine Tian. The FBI and IRS Criminal Investigation conducted the investigation leading to this prosecution.