A Glendale man charged with stealing blank checks from Inglewood City Hall and cashing them for more than $1.3 million pleaded not guilty this week in U.S. District Court.
Seung Chul Chang, 31, owner of Sun Building Maintenance janitorial firm, faces 29 felony counts, including bank fraud and interstate transportation of stolen property, said Assistant U.S. Atty. Jody Tabner-Thayer.
Chang, known as Danny, allegedly stole 34 blank checks from the city's Finance Department, printed his company's name as the payee, then forged the signature of an Inglewood city official. Prosecutors say he gambled away a portion of the money at Las Vegas casinos. City officials said some of the funds were discovered in Chang's business accounts, although the city would not disclose how much.
The checks were either deposited into the company's corporate accounts at various Los Angeles banks or cashed at Ron's Market or Sam's Snack Stand, two area check-cashing establishments, according to court documents.
Chang, arrested Aug. 1 at his home, is also accused of altering the amount on a legitimate city check issued to his company from $7,233 to $17,233.
Authorities were tipped off when Chang allegedly attempted to cash a $245,000 cashier's check drawn on California Korea Bank at the Las Vegas Hilton Hotel to pay a gambling debt. Officials at California Korea Bank, where Chang's company had an account, discovered the check had been reported stolen by the city.
Chang's attorney, Leonard Levine, declined to comment on the charges after Monday's arraignment in Los Angeles, saying only that his client is "anxious for the truth to come out" at the trial, which is scheduled for October.
Sun Building Maintenance, run by Chang and his father, cleaned all city facilities, including City Hall and the Police Department, from July to November of 1990. The firm was dismissed when it could not obtain a performance bond guaranteeing that it would complete its contract.
The checks, cashed between November and March and ranging from $50,000 to $470,547, were drawn on a city account at Wells Fargo Bank. Inglewood officials are blaming the bank for clearing the fraudulent checks without noticing that they lacked official signatures and contained rows of typed X's on the face indicating that they had been voided by the city.
The City Council has hired an outside attorney, commercial specialist Richard M. Mosk, to sue the bank as part of an effort to recover the money. Next week, the council is expected to close its accounts at Wells Fargo, which total roughly $50 million, and move the funds to another bank as a protest, city officials said.
City officials could not predict what impact, if any, the lost funds would have on city services.
Wells Fargo contends that the city was negligent in reviewing its monthly bank statements. The checks were processed automatically, as are most corporate checks, bank officials said. The bank has offered to reimburse the city for those few checks that cleared before the city received its first bank statement. The city has refused that offer.
In a related incident, Chang and the janitorial firm's manager, Anthony G. Ganioco, 51, are also charged with forging a check that was reported missing from Panasonic Corp., where Sun Building Maintenance performed cleaning duties. Ganioco was arrested Aug. 1 at Tokai Bank in Alhambra after depositing into a personal account a Panasonic check for $111 that had been altered to read $295,000, authorities said.