Case 8:18-cr-00547-PX Document 10-1 Filed 11/16/18 Page 1 of 4
Stipulated Facts: United States v. Byung Bang
The parties hereby stipulate and agree that if this case proceeded to trial, the United States
would prove thefollowingfacts
below beyond a reasonable doubt. They agree that these are not
all of the facts that would be proved if this case proceeded to trial.
Between at least in or about 2010 and in or about 2016, in the District of Maryland and
elsewhere, the Defendant, BYUNG BANG, a/k/a "Peter Bang" ("BANG"), devised a scheme
and artifice to defraud and obtain money from the government of Montgomery County, Maryland,
by means of materially false and fraudulent pretenses, representations, and promises, with the
intent to defraud and with knowledge of the scheme's fraudulent nature ("the scheme to defraud").
As part of the scheme to defraud, BANG embezzled money from the government of Montgomery
County using fraudulent entities that BANG controlled and directed. BANG directed funds from
Montgomery County to BANG's fraudulent entities. These funds were supposed to support an
economic development agreement between Montgomery County and the Chungcheongbuk-Do
province of South Korea. BANG then failed to report the money that he embezzled from
Montgomery County on his individual income tax returns. BANG willfully made and subscribed
false tax returns for the tax years 2010 through 2015, which contained written declarations made
under the penalties of peljury, and which he did not believe to be true and correct as to every
material matter. In total, BANG embezzled $6,705,669.37 from the Montgomery County
From at least 2010 through approximately July 2016, BANG was employed as the Chief
Operating Officer ("COO") of the Department of Economic Development for Montgomery
County, Maryland ("MC-DED"). MC-DED's stated purpose was to assist private employers who
were located, planned to locate, or substantially expanded operations in Montgomery County. In
2016, the MC-DED was privatized and BANG's position within Montgomery County was moved
to the Montgomery County Department of Finance where he was employed until May of 2017.
One of the ways that MC-DED accomplished its goal of assisting private employers within
Montgomery County was through the creation of business incubator and/or innovation centers.
These incubator/innovation centers helped small businesses by giving them below-market rent,
placing them in an environment with other similar businesses, and providing them education on
how to run a business. The goal of the program was to help the business to grow so it could graduate
from the incubators and relocate within Montgomery County, thus bringing jobs and revenue to
Montgomery County had several incubators throughout the County that had different areas
of focus, such as computer technology; biological technology; and small minority- and womenowned businesses. Each of these incubator/innovation centers brought in their own money from
rent but were subsidized by MC-DED. As COO of MC-DED, BANG oversaw budgets for these
incubators. BANG was authorized by the County to request disbursements of County funds to the
incubators to help the program. From time to time, BANG would "park" money in incubator
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accounts so that the money was more readily available and accessible for MC-DED projects. If
BANG did not park the money in the incubator accounts, the money would be placed in the
County's general fund and potentially would be unavailable for future MC-DED projects.
BANG's position at the MC-DED 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.
Business Relationship between Montgomery County and South Korea
In 2010, Montgomery County and Chungcheongbuk-Do, a province in South Korea
("Chungbuk Province"), entered into an agreement where Chungbuk Province would provide
$2,000,000 to Montgomery County to assist in developing an incubator fund. Those funds resulted
in the issuance of two business loans that later were repaid. In 2015, Montgomery County returned
the $2,000,000 at the request of Chungbuk Province.
Establishment of Chungbuk Incubator Fund LLCs To Facilitate Fraud Scheme
On or about July 22,2010, BANG caused Articles of Incorporation to be filed with the
Maryland State Department of Assessments and Taxation ("MD-SDA T') for a company named
Chungbuk Incubator Fund LLC. On August 25,2014, BANG filed Articles of Cancellation with
MD-SDAT for Chungbuk Incubator Fund LLC.
On June 23, 2015, Articles ofIncorporation were filed with MD-SDAT for a company also
named Chungbuk Incubator Fund LLC. On December II, 2015, Articles of Cancellation were
filed for Chungbuk Incubator Fund LLC (collectively, both cancelled LLCs are referred to as the
"Chungbuk Entities"). BANG is not listed on the Articles of Incorporation as a stockholder,
member, or registered agent; however, BANG directed Individual I, a person whose identity is
known to the United States, to organize the Chungbuk Entities. BANG exercised control over
bank accounts opened in the name of the Chungbuk Entities. On the Articles of Cancellations for
each LLC, BANG was listed as the member designated to wind up the affairs of both entities.
BANG opened four bank accounts in the name of"Chungbuk Incubator Fund, LLC," listing his
home address as the address of the LLC. BANG was either the sole signatory, or a joint signatory,
on these accounts.
BANG's Theft of Montgomery County Money
Between 2010 and 2016, BANG fraudulently authorized the disbursement of
approximately $6,705,669.37 from Montgomery County to the Chungbuk Entities' bank accounts
controlled by BANG. Specifically, between 2010 and 2016, BANG caused the Montgomery
County Department of Finance to send checks and direct deposit transfers totaling $5,447,964 to
the Chungbuk Entities' bank accounts. During that same time, BANG caused the Maryland
Economic Development Corporation to send a total of $1,213,987.63 to the Chungbuk Entities'
bank accounts. Also during this same time period, BANG caused the Maryland Conference and
Visitors Bureau to send a total of$43,717.74 to the Chungbuk Entities' bank accounts. purportedly
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to relocate tenants of an incubator center. Unbeknownst to Montgomery
were all made to bank accounts controlled by BANG.
County, these payments
[n furtherance of his scheme to defraud, BANG created nominee entities to issue fraudulent
invoices on his behalf, and opened bank accounts in the name of the nominee entities to hold the
embezzled funds for his personal usc.
BANG used the interstate wires in furtherance of his scheme to defraud. For instance, in
2015, as part of his scheme to defraud and with the intent of stealing money from the Montgomery
County government, BANG knowingly caused the following electronic transfers from a bank
account controlled by the Montgomery County government to BANG's Chungbuk bank account:
AUI!Ust 10, 2015
November 25, 2015
These funds were transferred in interstate commerce through wire transmissions sent from
within Maryland through servers outside of Maryland. Furthermore, in order to conceal the
proceeds of his scheme to defraud, on April 10,2016, BAI'\G caused to be filed a federal tax return,
by electronic means, that knowingly and intentionally failed to include income received by BANG
through the Chungbuk Entitics.
Montgomerv County Ethics Requiremcnts
As an employee of Montgomery County, BANG was required to comply with various
ethics regulations, including Montgomery County Code, Chapter 19A, Ethics, Article Ill. That
article prohibits an employee from participation in any matter that affects any (1) business in which
the employee holds an economic interest, or (2) malter, if the public employee knows or reasonably
should know that any party to the matter is a business in which the employee has an economic
interest or is an officer, director, trustee, partner, or employee.
BANG filled out financial disclosure statements for the years 2012, 2013, 2014, 2015, and
2016. Those statements required BANG to disclose infomlation such as real property holdings;
sources of income; whether BANG had a confidential relationship with the income source; the
type of income received; and the amount of income received. BANG did not disclose his interest
in the Chungbguk Entities in his 2012, 2013, 2014, 2015, or 2016 financial disclosure statements,
and he did not disclose the type or amount of income received from the Chungbuk Entities.
Fraud and False Statemcnts
on Tax Rcturns
BANG caused to be filed with the IRS false U.S. Individual Income Tax Returns, Forms
1040, for the tax years 20 I0 through 2015, in which BANG knowingly and willfully failed to
report income BANG embezzled from MontgomelY County. For each of these years, BANG also
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tiled false U.S. Rcturns or Partnership Incomc. Forms 1065, which lililcd to include any incomc
that the Chungbuk Entities rcceivcd from BANG's scheme 10 defraud Montgomery County.
While engaging in the scheme to defraud, BANG willfully failcd to report the money he
embezzled from his schcme to dethllld Montgomery County on his individual income tax returns
for the tax years 2010 through 2015. BANG signed each of these tax returns under penalties of
peljury and filcd them with the IRS. AI the timc BANG signed these returns, BANG knew lhal
the returns were materially tillsc. In total, for the tas ye<lrs 20 I 0 through 2015, BANG tililecl to
report 56,367,745.07 in funds thal hc embczzled from Montgomery County, resulting in a tax loss
to the IRS 01'52,335.913. More speeilieally, HANG embezzled the following amounts each year
from Montgomery County and lidled lo report those flmds 10 the IRS as roll Oil's:
Tax Due &
$353.3 I 0.00
S I ,080,613.30
Specifically. on aboul April 10,2016. BANG signed a 2015 U.S. Individual Income Tax,
Form 1040. under pcnalties of pCljury stating lhat his lax due and owing was 547.675. BANG
electronically filed this tax rcturn. In iilCt. as BANG knew, his tax liability for the 2015 tax ycar
should have been S585.355. On his 2015 lax return, HANG knowingly and willfully failed to
rep0l1 to the IRS S 1,398,315.50 that BANG cmbezzled from Montgomery County through his
"" '* *
I have read this statement of filClS.and have carefully reviewed it vith
acknowledge that it is true ami correct.
# '-2. J:
I am the attorney for l3yung l3ang. I havc carefully reviewed the statement of facts with
Gerald W. Kelly, Jr .. Esquire.