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United States of America v. Real Property Located At 475 Martin Lane

May 17, 2013

UNITED STATES OF AMERICA, PLAINTIFF,
v.
REAL PROPERTY LOCATED AT 475 MARTIN LANE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Audrey B. Collins United States District Judge

#:15418

FINDINGS OF FACT AND CONCLUSIONS OF LAW Trial Date: April 30, 2013

Commencing on April 30, 2013, the claims of Claimant Optional Capital Inc. ("Optional"), and the Kim Claimants to properties in each of the above consolidated actions were tried by the Honorable Audrey

B. Collins, United States District Court Judge, without a jury. On May 1, 2013, the claimants informed the Court that they achieved a settlement. The claimants orally withdrew certain of their claims, and these withdrawals were later confirmed by Notices.*fn1

As a result of these withdrawals, the only remaining claims were

(1) Optional's claims to all of the properties except the properties claimed by Se Young Kim and Young Ai Kim, and (2) Se Young Kim and Young Ai Kim's claims. Because all other claims were withdrawn, these remaining claims stood unchallenged. The settlement was put on the record under seal.

Although none of the remaining claims were contested, Optional wished to present to the Court further evidence tracing the funds the Kim Claimants converted from Optional to the properties to which Optional had outstanding claims. The Kim Claimants did not object to Optional's request and, having no further claims to litigate, the Kim Claimants left the proceedings. The Court granted Optional's request and heard its additional, unchallenged evidence.

Based on the evidence presented to the Court at trial, pursuant to Local Rule 52-1, the Court makes the following findings of fact and conclusions of law in this matter.

From July 30, 2001 through November 5, 2001, Christopher Kim, Erica Kim, and Bora Lee ("the Kims") converted funds from Optional. The approximate amount that the Kims converted from Optional was 37.1 billion Korean won. Christopher Kim was the head of Optional, was on Optional's board of directors, and ran Optional's day-to-day activities during the period the Kims converted funds from Optional. Claimant Erica Kim was a director of Optional and Claimant Bora Lee was a manager during this same period. The Kims also owned the majority of Optional's stock by causing entities controlled by them to purchase Optional stock on the open market; by causing three of their wholly-owned corporations to purchase Optional stock from Kwangju Bank; and by using sham corporations to purchase additional stock they caused Optional to issue through a series of paid-in capital increases.

FINDINGS OF FACT

As a result of these stock purchases, the Kims gained control of Optional by early-to-mid 2001. In light of the foregoing, and based on their own admissions, Christopher Kim and Erica Kim were fiduciaries of Optional during the entire period the Kims converted funds from Optional. The Kims worked together to convert Optional's funds. The Kims' purchases of Optional's stock were part of the same scheme by which the Kims converted Optional's funds. This scheme was complex, involving numerous international financial transactions among numerous shell entities. The complexity of the scheme appears to have been aimed at thwarting detection or tracing. Optional contends that the Kims used the proceeds of their conversion to obtain the properties that are the subject of this action. Optional has asked the Court to impose a constructive trust in its favor over these properties as a remedy for the Kims' conversion.

Because the Kims were fiduciaries of Optional, Optional's burden to trace the funds the Kims converted from Optional to the subject properties is minimal. Having heard the evidence presented at trial, the Court finds that Optional Capital, Inc., has sufficiently traced the proceeds and product of the 37.1 billion Korean won converted from it during the period of July 30, 2001 through November 5, 2001, to each of the following properties:

(1) The real property located at 475 Martin Lane, Beverly Hills, CA; now a substituted res of $2,957,240.40 (plus interest), representing the ...


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