On June 3, 2020, the US Department of Justice filed a complaint in the US District Court for the District of Alaska for the forfeiture of over $20 million in assets acquired through a scheme perpetrated by Kenneth Zong, a US citizen. According to the complaint, Zong conspired with three Iranian nationals in violation of the International Emergency Economic Powers Act (IEEPA), the Iranian Transactions and Sanctions Regulations (ITSR) and federal money laundering statutes, to unlawfully remove Iranian owned funds held in Korean bank accounts, convert the funds into US dollars and euros, then launder the funds into and through accounts held by various shell companies in multiple jurisdictions, including the US, United Arab Emirates and Korea. Zong’s alleged scheme began in 2011 according to the complaint, and resulted in the transmission of over $1 billion in unlawful transactions, $20 million of which was used in an attempt to purchase the Tbilisi Hotel in the Republic of Georgia in 2011 and 2012. The funds used to purchase the hotel are the subject of the forfeiture complaint.
In April 2020, Kenneth Zong was the subject of an investigation that resulted in criminal charges against the Industrial Bank of Korea (IBK) for violating the Bank Secrecy Act and for failing to institute an acceptable anti-money laundering program in its New York branch, that resulted in a deferred prosecution agreement with the DOJ and $86 million in civil forfeiture and penalties for the bank. The DOJ’s investigation of IBK began in 2011 when the bank reported $10 million in suspicious transactions to the US Department of Treasury’s Office of Foreign Assets Control (OFAC) – an investigation that led to the alleged discovery of $990 million in additional unlawful transactions and Zong’s fraudulent bank scheme.