Newport lawyer accused of $8 million investment scam pleads guilty to 3 felonies

A Newport Beach lawyer accused of stealing at least $8 million that he promised to invest on behalf of his clients pleaded guilty in federal court Thursday to two felony counts of wire fraud and one felony count of tax evasion, according to the U.S. attorney’s office in Los Angeles.

Stephen Young Kang faces up to 45 years in prison at his sentencing Feb. 11.

Federal prosecutors alleged that Kang, 46, had been scamming clients since 2002. An indictment released in September accused him of collecting their investment money and then spending it on personal expenses and luxury goods.

In a plea agreement, Kang admitted that his victims included Ottogi America Inc., a food distributor that wired Kang $3.7 million to buy property in Gardena. Instead of purchasing the land, Kang transferred the money into other bank accounts he controlled and used some of it to partially pay back other victims, including one in Texas who trusted Kang with $500,000.

Prosecutors alleged that even while he was facing the felony charges this year, Kang cheated the Texas victim again by offering to pay back the initial investment with interest from a life insurance policy. However, the U.S. attorney’s office said, he failed to mention that the policy was worth only $250,000 and that his wife was the sole beneficiary.

Prosecutors had charged Kang with 30 felonies related to the scam, but most of those charges were dropped as part of the plea agreement.

The charges included allegations that Kang stole money from overseas clients he had promised to help get into the EB-5 visa program, which requires applicants to invest $500,000 in a company that will use it to create or retain jobs in the United States.