Ho Shin Lee from Los Angeles, California, was indicted for laundering over $1.9 million from Appalachian State University, according to a news release from the United States Attorney’s Office in the Western District of North Carolina.
In March 2016, the Connect NC Bond passed and Appalachian State University was awarded $70 million to build a new teaching and research facility for the Beaver College of Health Sciences, according to the Beaver College website.
The contract to build this building was given to Rodgers Builders, court documents said.
Meanwhile, Lee filed to register Royce Hub Trading Inc. with the Secretary of State of California in November 2016. According to the indictment, he then opened a bank account under the company name.
On or about Dec. 2, 2016, an Appalachian State employee received an email with a direct deposit form and instructions to change Rogers Builders banking information. The email came from an unidentified individual who claimed to be an employee of Rogers Builders. The email came from firstname.lastname@example.org, but the actual Rogers Builders’ email is rogersbuilders.com, according to court documents.
The App State employee followed the directions given in the email to change the payment information and $1,959,925.02 was put into Lee’s new company bank account, according to the indictment.
“Our employees acted quickly to alert authorities to the situation, and law enforcement acted immediately upon our notification,” Director of University Communications Megan Hayes said via email.
After receiving the fraud proceeds on or around Dec. 12, 2016, Lee rushed to transfer the money he had received out of his bank account in a way that the transactions would not be easily found by the fraud proceeds, according to the indictment.
Lee has been charged with 14 counts of money laundering, with a maximum penalty of 20 years of prison and a $500,000 fine for each charge, according to the press release.
“There have been no construction delays with the College of Health Sciences building project and it remains on schedule,” Hayes said via email.
On Jan. 24, U.S. Attorney R. Andrew Murray announced that $1,544,442.33 would be returned to Appalachian State, according to the press release.
“We are actively pursuing the remainder of the funds, and as criminal strategies continue to evolve, we are modifying our business processes as well as technical controls to adapt to an environment of continual fraud attempts and threats faced by individuals, government organizations and private industry alike,” Hayes said via email.
Story by: Mariah Reneau, Senior A&E Reporter