A 53-year-old Federal Way woman has admitted in federal court that the investment advice she sold to members of the local Korean community was a mirage, not a moneymaker. On Thursday, Jenni Yoon Jeong Lee pleaded guilty to three counts of wire fraud and two counts of bank fraud after prosecutors said she spent years running a phony investment operation that pulled in at least $3 million, drained more than $1.5 million in actual losses, and sent at least $900,000 to casinos. Sentencing is set for September 18, 2026.
What Prosecutors Say She Did
According to a charging summary from the U.S. Attorney’s Office, Lee presented herself as a financial advisor to members of the Korean community and opened business entities with names that made them look like legitimate investment firms. Clients wrote checks they believed were headed into bona fide investments. Instead, prosecutors say, Lee deposited the money into accounts she controlled.
The plea agreement covers three representative wire transfers from self-directed IRAs and two bank deposits tied to the alleged fraud. Those five counts together carry a statutory maximum of up to 30 years in prison, according to prosecutors. Investigators say some of the money was kicked back to earlier investors in a Ponzi-style pattern, while other funds were diverted to Lee’s personal use.
Regulators Had Already Sounded the Alarm
Federal regulators were chasing Lee long before the criminal case landed in court. In April 2025, the Securities and Exchange Commission filed a civil suit accusing her of raising roughly $2.7 million through sham entities and unsecured promissory notes, and of steering self-directed IRA money into companies she secretly controlled, according to the SEC.
Washington’s Department of Financial Institutions later brought its own enforcement action against Lee and her Puget Sound Financial entities, alleging unregistered securities offerings and false statements and imposing fines and costs in a statement of charges, per the DFI. Together, the federal and state filings outline what regulators describe as an affinity-based pitch that leaned heavily on trust within the Korean-American community.
Who Got Hurt, and How Investigators Tracked It
The federal investigation, carried out by the FBI, identified at least 28 victims who handed savings to Lee, including many older investors relying on retirement funds. Agents ultimately traced more than $3 million through the shell companies she controlled, according to the U.S. Attorney’s Office.
In court filings, Lee acknowledged struggling with a gambling addiction and admitted using some investor money at casinos, prosecutors say. The criminal case is being handled by Assistant U.S. Attorney Sean H. Waite and remains under active FBI investigation.
What Comes Next in Court
Lee’s guilty plea clears the way for a September sentencing hearing, but the legal fallout is not limited to the criminal case. The SEC’s civil complaint seeks disgorgement of ill-gotten gains and monetary penalties, according to the SEC, while the state Department of Financial Institutions has already imposed administrative penalties and costs in its order, according to the Washington DFI.
On the criminal side, the wire fraud and bank fraud counts technically carry up to 30 years behind bars. The actual sentence will be guided by federal sentencing rules, which take into account the amount of loss, the number and vulnerability of victims, and Lee’s acceptance of responsibility. Victims who suffered losses could be included in court-ordered restitution and may also pursue recovery through civil proceedings.
Where Victims Can Turn
Authorities urge anyone who believes they were caught up in the scheme to preserve emails, text messages, account statements and any promissory notes or investment paperwork. Potential victims can submit complaints to the FBI’s Internet Crime Complaint Center at IC3 and review investor education materials and fraud warnings at Investor.gov.
Additional coverage of the case and community reaction is available through MyNorthwest. Legal experts say affected residents may want to consult an attorney about their options for restitution and possible civil claims.
