The U.S. Securities and Exchange Commission filed charges against Jenni Yoon Jeong Lee (a/k/a Jenni Lee or Yoon Jeong Lee) of Federal Way, Wash., and Washington-based Evergreen Property Developments LLC, which Lee controlled, for their years-long fraudulent scheme targeting elderly members of the Korean-American community.
Lee was previously associated, according to the filing, as a registered representative with several broker-dealers from March 2001 to September 2006, July 2008 to November 2008, and November 2010 to January 2011. At times during the fraudulent scheme, she was employed as a contractor for an affiliate of a registered investment adviser; however, Lee wasn’t authorized to provide advice regarding securities investments on behalf of the registered firm or affiliate. The SEC said she is licensed as an insurance producer with the Washington State Office of the Insurance Commissioner.
According to the SEC’s complaint, from at least May 2015 to March 2024, Lee, through Evergreen and other sham entities that she controlled, solicited approximately $2.7 million from more than 33 investors. As alleged in the complaint, Lee used her family relationships and affiliation as a member of the Korean-American community to gain the trust of her victims – even helping some select insurance products and apply for Medicare benefits. As alleged, Lee falsely held herself out as a current investment adviser and misrepresented to her clients that she would invest their money through or in legitimate companies capable of providing returns. Instead of making genuine investments on her clients’ behalf, the SEC alleges that Lee violated her fiduciary duties by investing her clients’ funds with or in Evergreen or other entities she controlled and masking the reality that the entities had no genuine business operations and lacked any capacity to generate returns on the funds Lee raised.
The SEC also alleges that Lee, while acting as an investment adviser, recommended that some of her clients fund self-directed individual retirement accounts, or SDIRAs, and obtained access to those SDIRAs through false or deceptive means, such as naming herself as an interested party or listing her email address on account applications. As alleged, Lee then used her clients’ SDIRA funds, often without her clients’ knowledge or consent, to purchase direct investments in Evergreen and her other entities in the form of unsecured promissory notes that Lee offered and sold. These promissory notes included, as alleged, promises to make yearly interest payments ranging from 1% to 7% and to return investors’ principal upon maturity. Most of Lee’s clients relied on her verbal assurances regarding investing and future returns, according to the complaint.
As the SEC further alleges, Lee used all the funds she raised to either make Ponzi-like payments to earlier clients or to pay for her personal expenses, which included supporting her gambling habit and transfers to her parents’ accounts.
The SEC’s complaint, filed in the U.S. District Court for the Western District of Washington, charges Lee and Evergreen with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933, and charges Lee with violating Sections 206(1) and (2) of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, including conduct-based injunctions against Lee, disgorgement, and civil penalties.
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