While merely “chopped liver” compared to Ponzi King Bernie Madoff, Brian Kim, the founder of Liquid Capital Management, was indicted by a New York County Grand Jury for his own Ponzi scheme that allegedly defrauded 45 people out of approximately $4,000,000. To his alleged victims, however, Mr. Kim and Liquid Capital Management were no different than Bernie. He allegedly took his naive investors on a wild ride of fraud and white collar crime that resulted in a significant loss.
According to Manhattan District Attorney Cyrus Vance Jr., Mr. Kim began his scheme back in 2003 and convinced numerous people that he was an accomplished trader. Instead, prosecutors allege Mr. Kim was not really a trader, but more of a traitor (a financial Benedict Arnold if you will) to his duped clients and pocketed their money while suffering major losses in his investments. Like the godfather of Ponzi schemes, Mr. Kim allegedly took a page out of Mr. Madoff’s playbook when he drafted false statements for his unknowing clients.
Unfortunately for these alleged victims, Mr. Kim is nowhere to be found. A warrant was issued in New York County Supreme court after he failed to show up for a trial where he was alleged to have stolen in excess of $400,000. As a result of this warrant and his past alleged actions, Manhattan prosecutors sought a No-Arrest or “NA” indictment from the Grand Jury. Should Mr. Kim pop up somewhere, he will be held and ultimately returned to New York to face both cases.
Mr. Kim faces the charges of Grand Larceny in the First Degree ( a class “B” felony), Grand Larceny in the Second Degree (a class “C” felony), Scheme to Defraud in the First Degree (a class “E” felony), violating the Martin Act (a class “E” felony) and Falsifying Business Records in the First Degree (a class “E” felony). “B” felonies are punishable by up to 25 years in prison while “C” and “E” felonies are punishable by up to 15 and 4 years respectively.
It is interesting to note that there are two separate charges of Grand Larceny. Normally, if the theft is from one victim, the value of the theft is aggregated into one single count. If the theft comes from different victims, there is some case law that permits the aggregation where the thefts were part of the same scheme. Without more information, I could only speculate as to why the indictment was drafted as such. The answer is probably fairly straight forward. Regardless, it is clear that Mr. Vance is serious about prosecuting fraud especially where there are so many victims of an alleged multi-million dollar scheme.
Information and detailed evaluations of the crimes of Grand Larceny and Falsifying Business Records can be found on the respective links. Beyond these crimes, a significant amount of information from cases in the press to analysis of legal decisions and statutes can be found on both the Crotty Saland PC website and the New York Criminal Lawyer Blog.
The New York criminal lawyers at Crotty Saland PC represent the accused in all stages of criminal investigations and arrests throughout the New York City region. Before starting the criminal defense firm, both founding members served as prosecutors in the Manhattan District Attorney’s Office.