15 months for man con­victed in city’s 1st Bit­coin pros­e­cu­tion

Chicago Sun-Times - - TOP NEWS - BY SAM CHARLES, STAFF RE­PORTER scharles@suntimes.com | @samjcharles Joseph Kim

A Univer­sity of Chicago eco­nom­ics grad who hood­winked his for­mer em­ployer and other in­vestors out of mil­lions of dol­lars — much of it in cryp­tocur­rency — was sen­tenced to 15 months in prison Fri­day.

U.S. Dis­trict Judge An­drea Wood handed down the sen­tence to Joseph

Kim at the con­clu­sion of a 2 ½-hour hear­ing, dur­ing which Kim apol­o­gized to his vic­tims.

Kim was also or­dered to pay back $1,146,000 that he de­frauded from the down­town in­vest­ment firm he pre­vi­ously worked at, as well as sev­eral other peo­ple he took money from.

Pros­e­cu­tors asked for Kim to be sen­tenced to at least four years in prison, while Kim’s de­fense at­tor­ney asked for six months.

“I be­trayed your trust with my des­per­ate ac­tions,” Kim said to those he de­frauded. “I’m still des­per­ately try­ing to make things right.”

Fed­eral pros­e­cu­tors charged Kim, 24, with wire fraud last Fe­bru­ary. He was the first per­son in Chicago to be charged with wire fraud re­lated to cryp­tocur­rency.

In Septem­ber 2017, man­agers at Con­sol­i­dated Trad­ing LLC moved Kim from their bond group to a new cryp­tocur­rency group as the com­pany ven­tured into the in­dus­try, ac­cord­ing to the crim­i­nal com­plaint.

Kim soon trans­ferred 980 Lite­coins val­ued at $48,000 from a Con­sol­i­dated ac­count to his per­sonal ac­count, pros­e­cu­tors said. Kim told a cu­ri­ous com­pany di­rec­tor that he made the trans­fer only as “an in­ter­me­di­ary hold­ing space” for safety rea­sons, pros­e­cu­tors said.

By the end of No­vem­ber, he had pock­eted more than $3.2 mil­lion in Bit­coin trans­fers from com­pany ac­counts to cover his own trad­ing losses, though he re­turned about $1.2 mil­lion of it, pros­e­cu­tors said.

Kim was fired from Con­sol­i­dated and he then moved back to Ari­zona, where his par­ents live. Once there, he re­cruited oth­ers to give him money to in­vest — sev­eral hun­dred thou­sand dol­lars — which he then lost.

Some of his vic­tims, in­clud­ing his for­mer em­ploy­ers, took an op­por­tu­nity to ad­dress Wood and de­tail the hard­ships they’ve un­der­gone as a re­sult of Kim’s scheme.

“Some peo­ple steal with a gun, some peo­ple steal with a com­puter,” said Colby Lam­ber­son, one of the founders of Con­sol­i­dated Trad­ing. “He stole this Bit­coin, be­trayed our trust and lied about it.”

Kim’s at­tor­ney, Wil­liam Ziegel­mueller, noted that, while Kim may have de­frauded peo­ple of mil­lions of dol­lars, he did not spend any of it on him­self be­cause it was all lost.

Kim, who is now barred from work­ing in fi­nance, is cur­rently work­ing at Home De­pot and is pur­su­ing a de­gree in com­puter sci­ence at Ari­zona State Univer­sity.

Wood granted Ziegel­mueller’s re­quest to al­low Kim to re­port to prison on May 1 so he may com­plete his first year at Ari­zona State.

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