Korean national sentenced to 2 years and 9 months in prison for “bust out” bank fraud scheme


Date: June 1, 2023

Contact: newsroom@ci.irs.gov

Hee Soung Oh, a Korean national residing in Southern California, was sentenced today to two years and nine months in prison for bank fraud and bank fraud conspiracy, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between January 2017 and September 2017, Oh participated in a nationwide check kiting "bust out" scheme in order to obtain cash from banks. The scheme's participants obtained a real Republic of Korea passport that was altered to bear a new photograph and name, which they used to open bank accounts with a small amount of cash. The accounts were dormant until a time the participants believed the bank would allow the account holder to deposit a check and make withdrawals before the check actually cleared. At that time, the participants wrote checks from a different bank account with non-sufficient funds, deposited those checks into the dormant account, and then withdrew cash from the dormant account before the checks cleared. The participants would access funds by purchasing a money order and then depositing the money order into yet another bank account associated with the scheme.

The bust-out scheme resulted in an actual loss of $273,800 to the banks, and a total intended loss of $466,318 based on additional, unsuccessful bust-out attempts.

This case was the product of an investigation by the IRS Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorney Audrey B. Hemesath prosecuted the case.

Korean nationals Jong Eun Lee and Kyung Min Kong were previously sentenced: Lee to 22 months in prison and Kong to seven years and nine months in prison. Charges are pending against Ki Jang and Bon Soke Hong, who were indicted on Oct. 21, 2021. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.