Greenbelt, Maryland – Byung Il Bang, a/k/a Peter Bang, age 59, of Germantown, Maryland, pleaded guilty today to wire fraud and making false statements on his tax returns, in connection with a scheme in which he embezzled more than $6.7 million from the Montgomery County government and failed to report the money as income on his tax returns.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Montgomery County State’s Attorney John McCarthy.

According to his plea agreement, from 2010 through July 2016, Bang was the Chief Operating Officer (COO) of the Department of Economic Development for Montgomery County, Maryland (MC-DED).  In 2016, the MC-DED was privatized and Bang’s position was moved to the Montgomery County Department of Finance, where he was employed until May 2017. 

The MC-DED established business incubator and/or innovation centers throughout the County with different areas of focus, such as computer technology, biological technology, and small minority - and women-owned businesses, to help small businesses by giving them below-market rent, placing them in an environment with other small businesses, and providing education on how to run a business.  As MC-DED COO, Bang oversaw budgets for these incubators and was authorized to request disbursement of County funds to the incubators.  Bang’s position also enabled him to authorize and direct the disbursement of money from County partners, including the Maryland Economic Development Corporation (MEDCO), and the Maryland Conference & Visitors Bureau, without any significant oversight or approval.

In 2010, Montgomery County and the Chungcheongbuk-Do province of South Korea entered into an agreement to develop an incubator fund.  On July 20, 2010, Bang caused a company called Chungbuk Incubator Fund LLC to be incorporated in the State of Maryland and opened four bank accounts in the name of the company, listing his home address as the address of the LLC.  Bang used this entity and the bank accounts to facilitate his fraud.

Bang admitted that between 2010 and 2016, he fraudulently authorized the disbursement of $6,705,669.37 from the Montgomery County government to the bank accounts of the fraudulent entities that Bang created and controlled.  Specifically, between 2010 and 2016, Bang caused the Montgomery County Department of Finance to issue checks and direct deposits totaling $5,447,964; caused MEDCO to send a total of $1,213,987.63 to bank accounts controlled by Bang; and caused the Maryland Conference & Visitors Bureau to send a total of $43,717.74 to the Chungbuk LLC accounts.  Bang did not report the money he embezzled as income on his individual tax returns.  His failure to report those funds as income resulted in $2,335,913 in taxes due and owing to the IRS.

Bang also admitted that he lied on his County financial disclosure statements for the years 2012 through 2016, by failing to disclose his interest in the Chungbuk entities, including: property holdings; his relationship with an income source; and the type and amount of income he received. 

As part of his plea agreement, Bang is required to pay restitution in the full amount of the victims’ losses, and to plead guilty in the Circuit Court for Montgomery County, to the state charges of theft scheme over $100,000, and misconduct in office.

Bang faces a maximum sentence of 20 years in federal prison for wire fraud, and three years in prison for making false statements on his tax returns.  U.S. District Judge Paula Xinis has scheduled sentencing for February 22, 2019 at 1:00 p.m.

United States Attorney Robert K. Hur commended the IRS-CI and the Montgomery County State’s Attorney’s Office for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Thomas M. Sullivan and Erin B. Pulice who are prosecuting the case.

 

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Greenbelt, Maryland – U.S. District Judge Paula Xinis sentenced Byung Il Bang, a/k/a Peter Bang, age 59, of Germantown, Maryland, today to four years in prison, followed by three years of supervised release for federal wire fraud and tax charges, in connection with a scheme in which he embezzled over $6.7 million from the Montgomery County government and failed to report the money as income on his tax returns.  Judge Xinis continued the sentencing hearing concerning restitution and forfeiture until Friday, March 1, 2019, at which time the judgment will be finalized.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Montgomery County State’s Attorney John McCarthy.

“Mr. Bang lied to his colleagues, government officials and the IRS over an extended period of time.  The $6.7 million that he embezzled deprived Montgomery County taxpayers of funds that could have been used for schools, libraries, and other expenditures, and harmed the County’s reputation,” said U.S. Attorney Robert K. Hur.  “Corrupt public employees undermine everyone’s faith in government.”

“Through strong Federal and County cooperation and investigation we were able to bring Mr. Bang to justice.  It is important that people who betray the public trust be held accountable.  Today’s sentence is the next step in our effort to close this chapter of greed and corruption in the career and life of Byung Il “Peter” Bang,” said State’s Attorney John McCarthy.

According to his plea agreement and other court documents, from 2010 through July 2016, Bang was the Chief Operating Officer (COO) of the Department of Economic Development for Montgomery County, Maryland (MC-DED).  In 2016, the MC-DED was privatized and Bang’s position was moved to the Montgomery County Department of Finance, where he was employed until May 2017. 

The MC-DED established business incubator and/or innovation centers throughout the County.  As COO, Bang oversaw budgets for these incubators and was authorized to request disbursement of County funds to the incubators to further the program.  Bang’s position also enabled him to authorize and direct the disbursement of money from County partners, including the Maryland Economic Development Corporation (MEDCO), and the Maryland Conference & Visitors Bureau, without any significant oversight or approval.

In 2010, Montgomery County and the Chungcheongbuk-Do province of South Korea entered into an agreement to develop an incubator fund.  On July 20, 2010, Bang caused a company called Chungbuk Incubator Fund LLC to be incorporated in the State of Maryland and opened four bank accounts in the name of the company, listing his home address as the address of the LLC. 

Bang admitted that between 2010 and 2016, he fraudulently authorized the disbursement of $6,705,669.37 from the Montgomery County government to the bank accounts of the fraudulent entities that Bang created and controlled.  Bang admitted that most of the funds were used to fuel his gambling addiction.

Bang did not report the money he embezzled as income on his individual tax returns.  His failure to report those funds as income resulted in $2,335,913 in taxes owed to the IRS.

Bang also lied on his County financial disclosure statements for the years 2012 through 2016, by failing to disclose his interest in the Chungbuk entities, including: property holdings; relationship with an income source; and the type and amount of income received. 

Bang previously plead guilty to the following charges in the Circuit Court for Montgomery County: theft scheme over $100,000; and misconduct in office.  His sentencing on those charges is scheduled for March 7, 2019.  Judge Xinis ordered that Bang’s federal sentence will be served concurrent to whatever sentence is imposed on his state charges.

United States Attorney Robert K. Hur commended the IRS-CI and the Montgomery County State’s Attorney’s Office for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Thomas M. Sullivan and Erin B. Pulice who are prosecuting the case.