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Department of Justice Seeks Forfeiture of $20 Million in Assets Illegally Laundered by Alaska Man

viacheslav-bublyk-6WXbPWhT8c8-unsplash-300x200An Alaska man accused of laundering $1 billion held in South Korea on behalf Iranian nationals has had a forfeiture complaint filed against him by the U.S. Department of Justice (DOJ), according to federal court documents released last Thursday.

The U.S. District Court for the District of Alaska has filed a civil forfeiture complaint accusing Kenneth Zong, a U.S. citizen, of conspiring with three Iranian nationals to evade the prohibitions of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR). The complaint alleges Zong engaged in “false, fictitious and fraudulent transactions” designed to illegally convert and remove Iranian-owned funds equivalent to approximately $1 billion from a Korean bank.

Zong purportedly created fake invoices to help the Iranian nationals withdraw cash held in South Korean bank accounts in lieu of payment for oil shipments. He used the invoices to convince a Korean bank and financial regulators to release the funds, which he allegedly converted into more easily tradable currencies, such as U.S. dollars (USD), in contravention of the IEEPA and the ITSR.

The money was laundered into and through a host of shell company accounts in multiple jurisdictions, including the United States, the United Arab Emirates (UAE), and South Korea. The Korean bank that facilitated the transfer has reportedly agreed to pay $86 million in fines for its failure to prevent the laundering, federal prosecutors said.

The complaint claims assets equivalent to more than $20 million are subject to asset forfeiture based on violations of IEEPA and federal money laundering laws. The $20 million was allegedly used by Zong’s Iranian co-conspirators to attempt to buy a hotel in Tbilisi, Georgia in 2011 and 2012 before they were sanctioned by the U.S. Treasury. The funds are currently being held in a sovereign wealth fund owned by the UAE, according to the complaint.

Civil asset forfeiture is a process used by prosecutors and law enforcement agencies to seize property—real estate, vehicles, cash—that is suspected of being tied to criminal activity, even if the property owner hasn’t been arrested or convicted of a crime.

Zong was convicted and sentenced to two years imprisonment in Korea in 2013. He remains in Korea, sources indicate, but federal prosecutors want to have him extradited to the U.S. to stand trial. No attorney was listed for Zong in the court filings.

The investigation is being handled by the FBI and the Internal Revenue Service, Criminal Investigation (IRS-CI), which is responsible for investigating potential criminal violations of the U.S. Internal Revenue Code. The DOJ’s press release noted that a complaint is only an allegation, and the accused is presumed innocent until proven guilty beyond a reasonable doubt in court.

South Florida Civil Asset Forfeiture Attorney 

Has your lawful property been seized using asset forfeiture? Contact Brian Silber, P.A. to set up a free initial consultation and work with one of South Florida’s most experienced civil asset forfeiture attorneys.

Source: 6.3.20 justice department seeks forfeiture of more than $20 million in assets relating to unlawful use of financial systems to evade sanctions.pdf

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