I’m not sure how I missed the sad tale of Joohyun Bahn before now. He agreed to an SEC order last week for FCPA violations. This was in connection with his criminal sentencing that also happened last week, after first being arrested in January 2017.
It’s uncommon for real estate to insect with the FCPA, but this tale involved a building in Vietnam and the potential acquisition by a Middle East sovereign wealth fund. The tale also ends up ending the political career of Ban Ki Moon, the former U.N. Secretary General who was expected to run for president of South Korea.
Mr. Bahn moved around in various real estate jobs around New York before landing a nice job at a real estate firm. Shortly after joining the firm, his father offered him an opportunity. His father was involved with company that built a trophy building in Vietnam known as Landmark 72. This would be Mr. Bahn’s first international deal, the opportunity to earn a big commission, help his father, and help a big company.
Mr. Bahn was clearly in over his head.
He fell in the treacherous circle of Malcolm Harris who claimed he could help with the Landmark 72 deal for a cut of the commission. He told Bahn to focus on Middle East sovereign wealth funds. He claimed to have a contact at the Qatar Investment Authority who was interested.
Then Harris made his play and told Bahn that his contact at the QIA required a bribe to facilitate the purchase. Bahn brought this news to his father and the company apparently agreed to make the $500,000 up front payment. Harris pocketed the money. Harris continued to play Bahn along while spending the bribe.
As part of his sentencing, Bahn said that he knew the bribe was wrong. He didn’t realize it was an FCPA violation. He signed an anti-bribery policy at the real estate firm. He just thought bribery was a necessary part of international business, a business he had little exposure to.
While Bahn was getting strung along by Harris, he in turn was stringing along the building owner. Harris gave Bahn a forged letter of intent from QIA. Bahn gave the building owner a letter he had forged from a UK bank showing that the QIA had put funds into an escrow account as a deposit.
It seems that QIA had some interest in the Landmark 72. But that all fell apart when the building owner came under scrutiny for corruption. The chairman committed suicide and detailed bribes he had paid in his suicide note. The $500,000 bribe by Bahn was revealed in the underlying investigation.
The timing of Mr. Bahn’s arrest coincided with the conclusion of Mr. Bahn’s uncle’s term as U.N. Secretary-General and reports that Ban Ki Moon intended to run for the presidency of South
Korea. Mr. Bahn was arrested the day before Ki Moon was scheduled to fly from New York back home to South Korea. Because of the timing, instead of focusing on his run, Ki Moon was forced to respond to the indictment against his brother and nephew instead of his candidacy. A month later, he withdrew from the race.
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