Former head of South Korean seismology center is sentenced to prison for money laundering

The former head of South Korea's earthquake research center was sentenced Monday to 14 months behind bars for laundering more than $1 million in bribes from two seismological companies, including one based in Pasadena, that paid him in exchange for insider information.

Heon-Cheol Chi, a 59-year-old resident of South Korea, was also ordered to pay a fine of $15,000 and serve a year of supervised release after he gets out of prison.

Prosecutors had asked U.S. District Judge John F. Walter to impose a five-year prison term, while the defense argued for a six-month sentence that would include time served.

Defense attorney Marilyn E. Bednarski said Chi would return to South Korea upon release from custody.

“The sentence reflected the judge's view of how to balance the seriousness of the offense with Mr. Chi's extraordinary characteristics,” she said outside court.

Chi was convicted in July of one federal count of transacting in criminally derived property. The jury in downtown Los Angeles failed to reach a unanimous verdict on five other counts of money laundering.

“This is precisely the kind of corruption and abuse of the U.S. banking system that the U.S. money laundering statutes seek to prohibit and prevent,” federal prosecutors wrote in sentencing papers.

Chi headed the Korea Institute of Geoscience and Mineral Resources' Earthquake Research Center, where he tested seismological equipment, offered technical certifications for equipment used in government-funded projects and developed an early-warning earthquake system.

According to evidence presented at trial, Chi laundered funds that were the proceeds of bribes he accepted in violation of South Korea law.

“The American financial system is not to be used as a storehouse for the proceeds of corrupt activity,” acting U.S. Attorney Sandra R. Brown said following the trial.

“This defendant used a bank account here in Southern California to conceal over $1 million in bribe money obtained through the abuse of his public position. This conviction sends a message that should be heard around the world.”

According to the U.S. Attorney's Office, Chi abused his senior position at the earthquake center from at least 2009 through 2015, demanding more than $1 million in bribes from Pasadena-based Kinemetrics and United Kingdom-based Guralp Systems Ltd., which both produce seismic equipment. In exchange for the bribes, Chi gave the companies inside information on open contracts and advocated for the earthquake center and others to buy their equipment.

In addition to his use of cash payments and the U.S. banking system, evidence showed that Chi took a number of steps to conceal his bribery scheme, including instructing representatives of the companies to delete or not respond to his emails, requesting that company representatives not inform his colleagues at the center of his illegal arrangements with those companies, and by sending fictitious invoices listing a false address in New Jersey.

doug.smith@latimes.com

@LATDoug

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