NEWARK, N.J. (CN) - A series of real estate investment seminars scammed Korean-Americans out of $2 million they thought would go toward buying a Queens building known as Korean Village, a shareholder claims in federal court.
The luxury retail center known as Korean Village in Flushing has been on the market since 2014, at one point with a price tag of $32 million.
Despite having undergone more than $1 million in capital improvements in 2006 and 2011, the three-story shopping mall opened in 1997 and has been foreclosed upon twice since 2005.
The mall has been called "the heart of the Korean community" in New York City by the head of the Korean American Parents Association of Greater New York.
A federal complaint filed Tuesday says BIG Continent Inc. began promoting the purchase of Korean Village in the seminar series for real estate investments it has been holding since 2011.
With the building costing roughly $28.8 million at the time, BIG Continent's president Hee Nam Bae purported that the business had $4 million in capital and needed investments ranging from $5,000 to $500,000, according to the complaint.
Matthew Jeon, the attorney who filed the lawsuit Tuesday on behalf of investor Soon Duk Park, says Bae used Korea Village as a lure because it is an "attraction" in the Flushing area.
"He wanted to keep [the mall] in the community," Jeon said in an interview. "That got people's ears up and interested."
Jeon's client was allegedly one of 64 investors who contributed a total of $2 million.
Over the years, Park invested $110,000 from funds in her name and in the names of her daughter and cousins, according to the complaint.
Park says the seminars involved Bae and fellow BIG officer Hoyle Lee urging their primarily Korean-American audience to "act fast," saying they had 30 investors already lined up.
The two allegedly claimed to already own 20 buildings in Manhattan, and that the Korean Village deal was one of "numerous 'fancy' and lucrative real estate investment projects" investors could join.
Park says the money Bae and Lee raised never went to purchasing Korean Village, however, and instead was transferred to another company that the defendants used to buy property at 308 W. 48th St. and at 2027 First Ave., a pair of townhouses in Hells Kitchen and Harlem, respectively.
The investors have received no dividends, no return on their investment, and no explanations as to why their money was not spent on Korean Village, according to the complaint.
In May, Bae allegedly told shareholders in the two Manhattan buildings that he would transfer all assets in BIG Continent to a nonprofit organization he operates called Global Leadership Foundation.
Park's lawsuit names Bae, Lee and 10 other individuals as defendants, plus three more corporate entities, BIG Properties Hana LLC, 2027 First Avenue LLC and BKL Capital Inc.
Neither Bae nor Lee could be reached for comment.
In 2007 a lawsuit was filed in New York County Supreme Court against a man named Hee Nam Bae, who was listed as the registered owner of New York real estate firm City Lights Properties.
The suit alleged breach of contract and fraud when Bae allegedly failed to disclose that he did not solely control property he had agreed to sell.
Jeon said he hopes other Korean Americans will join the new lawsuit.
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