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Director of South Korea’s Earthquake Research Center Sentenced to 14 months in Federal Prison for Money Laundering Stemming from Million Dollar Bribe Scheme

Posted by Fay Arfa | Oct 03, 2017 | 0 Comments

LOS ANGELES – A former director of South Korea's Earthquake Research Center at the Korea Institute of Geoscience and Mineral Resources (KIGAM) has been sentenced to 14 months in federal prison for using a Southern California bank account to launder bribes he received from two seismological companies, including one based in Pasadena.

Heon-Cheol Chi, 59, of South Korea, was sentenced today by United States District Judge John F. Walter on one count of engaging in financial transactions with criminally derived property stating that this sentence “should send a clear message that this will not be tolerated by the law.”  Chi was convicted in July of the money laundering charge following a four-day jury trial in United States District Court. According to the evidence presented at trial, Chi laundered the proceeds of bribes he had accepted in violation of South Korea law. In addition to the prison term, Chi was ordered to pay a $15,000 fine and to serve one year of supervised release following the completion of his term in federal custody.

According to trial testimony, from at least 2009 through 2015, Chi abused his official position at KIGAM to demand and receive over $1 million in bribes from two seismological companies in exchange for providing them with unfair business advantages in the South Korean seismological market. The trial evidence showed that Chi advocated the purchase and use of equipment from these two companies by KIGAM and other South Korean customers. He also provided these companies with market intelligence and inside information, including confidential information about their competitors and the KIGAM bidding process.

The evidence showed that Chi directed that his bribe payments be paid in cash or wired to his personal account at a Bank of America branch in Glendora. Chi transferred approximately half of the bribe payments sent to that account to an investment account he held in New York City, and spent approximately 70 percent of the remaining funds in South Korea, where he resided and worked.

In addition to his use of cash payments and the U.S. banking system, the trial evidence showed that Chi took a number of steps to conceal his bribery scheme, including instructing representatives of the companies to delete or not respond to his emails, requesting that these company representatives not inform his colleagues at KIGAM of his illegal arrangements with these companies, and by sending fictitious invoices listing a false address in New Jersey.

The evidence at trial included numerous emails in which Chi admitted that he was acting illegally and that he accepted bribes that exceeded his legitimate income from KIGAM by a substantial margin.

The case against Chi is part of an ongoing investigation by the FBI's International Corruption Squad in Los Angeles. Assistant United States Attorney Poonam Kumar of the Major Frauds Section, and Trial Attorneys David Fuhr and Anna Kaminska of the Criminal Division's Fraud Section, prosecuted the case.

The Criminal Division's Office of International Affairs provided substantial assistance in this matter.

Component(s): USAO – California, Central

Contact: Thom Mrozek Spokesperson/Public Affairs Officer United States Attorney's Office Central District of California (Los Angeles) 213-894-6947

Press Release Number: 17-175 Updated October 2, 2017

Central District of California DOJ / 17-175 / October 2, 2017

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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