AG Schneiderman Announces Arrest of President of Korean Social Service Center for Theft Scheme of Nearly $800,000 from Immigrants

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Defendant Allegedly Posed as a Social Worker, Made False Promises of Low-Income Housing in Exchange for Thousands of Dollars in Fees

New York, NY - May 13, 2014 - Attorney General Eric T. Schneiderman today announced the arraignment of Ock Chul Ha, President of the Korean Social Service Center, a not-for-profit organization, for operating a pervasive scam on primarily elderly Korean-Americans for more than three years. Ha allegedly falsely promised clients – who came to him for advice regarding Medicare or Social Security – placement in low-income housing in the city’s coveted 421(a) program. If convicted, Ha faces up to 15 years in prison. The investigation revealed that over the course of three years, the total amount of money fraudulently taken by Ha under the auspices of the Korean Social Service Center was approximately $780,000. 
 
Ha was charged this morning with two counts of Grand Larceny in the Second Degree (a Class "C" felony), one count of Grand Larceny in the Third Degree (a Class "D" felony), one Count of Scheme to Defraud (a Class “E” Felony) and Criminal Tax Fraud in the Fourth Degree.
 
“At a time when more New Yorkers than ever are struggling with the cost of housing, Mr. Ha dangled the promise of an affordable home to steal hundreds of thousands of dollars, ruining lives in the process,” Attorney General Schneiderman said. “Exploiting insecurity and vulnerability – especially in one’s own community – is despicable, and hopefully these charges can bring some measure of justice to the victims of Ha’s scheme.”
 
According to the Attorney General's felony complaint, filed in New York County Criminal Court, Ha was the President of Korean Social Services, a Manhattan not-for-profit  located at 16 West 32nd Street, Suite 301. The complaint alleges that Ha preyed on vulnerable people, who he believed would be least likely to notify law enforcement of his scam.  He generally conned elderly Korean-American immigrants, widows and those on disabilily who spoke limited English. He is charged with scamming an electrician, who lost his entire life savings to Ha and an artist who borrowed money from relatives. He would gain their trust by relying on his position as a social worker, and then offer them an opportunity to obtain a precious commodity in New York:  affordable housing.
 
The investigation found that after Ha propositioned his victims, he would call them repeatedly, warning them that they would lose their chance at a 421(a) apartment if they did not act quickly. Often he would demand $28,500 from his victims. Most of his victims drained their bank accounts, borrowed from friends or pooled money from relatives to pay Ha. Ha would then demand more money from his victims, often citing the need for security deposits equaling six months of rent. He would provide his victims with a receipt from the Korean Social Service Center that reflected the total amount provided by his victim (often in the tens of thousands of dollars), the victim’s name, and a note indicating that these monies were for a deposit on a “N.Y.C H.D.” apartment. Over a period of several years, including between July 2011 and March 2014, the defendant allegedly defrauded approximately 42 individuals through the 421(a) scheme and other scams. Ha’ s bank accounts and the bank accounts of his associates reflect hundreds of thousands of dollars in deposits and withdrawals, often in relatively small increments, over that period. Ha has not reported any income generated in New York State over the past five years, despite receipts reflecting almost $800,000 over that same period. 
 
The investigation further revealed that after a March 18, 2014, search warrant was executed at Ha’s office, he began calling his victims and urging them not to cooperate with law enforcement. Ha dangled the prospect of reimbursement as a reward for their refusal to cooperate. 
 
The criminal complaint further alleges that, to conceal his Ponzi-style scheme, Ha would pay former victims of his fraud with monies obtained from more recent victims. Ha also opened and closed bank accounts with the assistance of associates and certain family members. The investigation into individuals who assisted Mr. Ha is ongoing. 
 
Ha, 37, of Fort Lee, NJ, pleaded not guilty at his arraignment today before Judge Bruna DiBiase.
 
This investigation, initiated by the Attorney General’s Charities Bureau, was a joint collaboration between the Attorney General’s Office and the New York State Department of Tax and Finance. The Attorney General thanks the New York City Department of Investigation for its cooperation on this case. The investigation was handled by Investigator Edward Ortiz and Chief Dominick Zarrella of the Attorney General’s Investigations Bureau, and Michael Yun of the NYS Department of Tax and Finance . This case is being prosecuted by Special Counsel John R. Spagna, Jacqui Brown, and Forensic Auditor Matthew Crogan, in the Attorney General’s Criminal Division, which is led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan. 
 
The charges are accusations, and the defendant is presumed innocent until and unless proven guilty in a court of law.
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