41-month federal prison sentence for former Korean Air manager in bank fraud case

Sung Peel Hwang, a former manager with Korean Air Lines on Guam, will serve 41 months in federal prison for bank fraud and money laundering involving more than $600,000, following his sentencing on Monday in the District Court of Guam.

Hwang was also ordered to pay more than half a million dollars in restitution to Korean Air Lines.

The sentence includes five years supervised release.

Hwang pleaded guilty to one count of bank fraud and one count of money laundering as part of his agreement with the U.S. Attorney’s Office.

The original indictment charged him with 15 counts of bank fraud, one count of aggravated identity theft and one count of money laundering.

Court documents state that between September 2015 and December 2018, Hwang cost KAL about $615,227 in losses.

Hwang would receive money from the airline to pay the Guam International Airport Authority a fee for each passenger who went through the Guam airport, as well as for other office expenses such as rental space. He would then report a lower number of passengers to the airport and keep the difference for himself.

Hwang’s plan went largely unnoticed because he was one of two co-signatories for KAL’s Guam office, and because he changed the address on his personal checking account to reflect that of the KAL office in Guam.

It wasn’t until the airport announced an audit on the KAL account when Hwang fled Guam to Texas. A federal warrant for Hwang’s arrest was issued in April 2023 and he was indicted the following month.

Hwang signed the plea agreement in October 2023 and later returned to Guam for sentencing on Monday, after spending 41 days in federal pre-trial detention.

He will receive those many days in credit against his 41-month sentence.

Hwang will also have to pay KAL for its losses totaling $615,271.51

When the audit showed the amount KAL owed to the Guam airport, the airlines promptly paid.

In its communication with District Court Chief Judge Frances Tydingco-Gatewood, the airline said Hwang tarnished their reputation publicly and with the Guam airport.

They also said they were troubled that Hwang had never formally apologized for his actions, even after he was arrested.

In a final attempt at leniency, defense attorney Rawlen Mantanona objected to two parts of the sentencing memorandum, both of which were overruled.

Mantanona argued that Hwang’s embezzlement was not through sophisticated means, and also that Hwang did not hold a position of trust.

“The defendant had put the money in his own personal account; it should have been easily found,” Mantanona said. “You don’t want to blame the victims, but if the victims had done any of their own due diligence, and checked … and had GIAA looked to see who was writing the checks that paid their bills, they would have discovered this. It wasn’t, in the defense’s opinion, a sophisticated means. It was very simple.”

U.S. Assistant Attorney General Benjamin Petersburg disagreed, as did Tydingco-Gatewood.

Hwang had a chance to address the court and said he was sorry to all those he hurt, and offered profuse sorrow to KAL and said he had not apologized to them earlier because he wasn’t sure the court would allow any communication.

He told the judge that his wife and young son have relocated to Texas, and requested that he serve his jail sentence at a federal facility about an hour away from his home.

He promised to use his jail time to take classes, and that he would be a model citizen and a positive example to his son and to his community.