A California businessan was sentenced to 6 1/2 years in federal prison for masterminding a Ponzi scheme that defrauded Korean-Americans out of over $8 million. Euirang "Chris" Hwang, 38, of Irvine, California, received a 78-month sentence from United States District Judge James Selna of the Central District of California. The FBI arrested Hwang in March 2010, along with his girlfriend, Sang Yi, and charged both with four counts of wire fraud. Hwang previously pled guilty on December 7, 2010 to wire fraud charges, which carries a statutory maximum penalty of twenty years in federal prison.
Hwang was the chairman and founder of Pinupitu Inc., an Irvine-based investment firm. Yi occupied several roles in Pinupitu, including president, secretary, and bookkeeper. Hwang primarily solicited members of the Korean-American community, who were under the assumption that Hwang was a self-made billionaire through extensive holdings in Korean, Japanese, and Chinese businesses. Investors were told that their funds would be used to purchase and later sell small businesses for profit, and in return were promised annual returns ranging from 24% to 45%. In total, sixty-five investors entrusted approximately $8.5 million to Hwang. However, Hwang did not use investor funds for legitimate investments, but instead paid for luxury car leases, personal expenses and returns to existing investors.
Along with his prison sentence, Hwang was also ordered to pay $7,003,654.00 in restitution to victims defrauded by the scheme. His co-defendant Yi, previously pled guilty to a single count of wire fraud and is scheduled to be sentenced later this year.