San Jose Businessman Sentenced to Nearly Three Years for $9 Million Fraud Scheme

A San Jose businessman, Joon Woo Kim, 58, was sentenced to 33 months in federal prison for orchestrating a $9 million fraud scheme, as announced by U.S. Attorney Ismail Ramsey. Kim pleaded guilty to defrauding investors in an electric vehicle fund and misleading a bank in a separate scheme. His indictment in July 2023 revealed that he misrepresented the investment activities of the M5 Doctors Fund, which he established in San Francisco. Prosecutors detailed how Kim induced investors to contribute to the fund by falsely claiming he would invest in securities for Tesla and other electric vehicle companies. Instead, he diverted nearly all the funds—approximately $4.8 million—into a wholesale food company co-owned with his wife. Throughout this period, from June 2015 to March 2022, Kim continued to mislead investors about the fund's financial health, falsely assuring them that it remained solvent and actively engaged in investments. In addition to the fraudulent fund activities, Kim also deceived Hanmi Bank by securing a $3.2 million business loan and a $1.3 million line of credit through false representations. The U.S. Department of Justice noted that many investors were non-profit institutions that would not have invested had they known the truth about Kim's actions. Alongside his prison sentence, Kim will face three years of supervised release and is required to pay over $4.7 million in restitution to his victims. He has also been mandated to present educational sessions on the consequences of fraud to MBA students at universities. Kim is set to surrender to authorities on September 3.