A longtime developer in Guam and the CNMI who has held the lease to the shuttered Rota Resort and Country Club has been sued by a South Korean corporation on allegations he forged the signature of a Starts Golf Course official in order to defraud the Korean company out of millions of dollars through an elaborate scheme.
Kandit has reached out to the U.S. Attorney’s Office for Guam and the NMI to verify whether federal law enforcement are investigating the allegations, which involve multiple federal crimes.
According to the civil suit filed last week in federal court in Guam, Hee K. Cho allegedly represented himself to the Korean company – PIGM – as a deal broker for the sale of Starts Golf Course in Dededo-Yigo, negotiated two separate deals, then under false pretenses began to receive payments from PIGM under the false claim of a sale of the multimillion dollar property.
The scheme, according to the lawsuit, involves two commercial property purchase agreements: one called a “true” agreement, and the other called a “false agreement.”
Some time in April 2022, according to the lawsuit, Mr. Cho contacted a former Rota Resort employee of his – Sunghyun Jeong – who was a director at PIGM at the time. Mr. Cho asked him whether PIGM was interested in purchasing golf courses in Guam.
“Cho emphasized to Jeong that Cho had relationships with the Japanese owners and companies of golf properties in Guam, that he was known in the industry, that he had local knowledge of the golf tourism market in Guam and Rota, and that he was suited to negotiate a sale,” the lawsuit states.
The lawsuit goes on to state, “Cho told Jeong that none of the golf courses would talk to Jeong, PIGM, or any of their potential investors directly or agree to any sale to them, but that because of Cho’s relationships and reputation, he could negotiate a sale.”
While the lawsuit mentions Cho’s alleged offer to broker deals for the sale of more than one golf course, the lawsuit only mentions Starts Golf Course and an alleged fraudulent scheme involving that golf course. It should be noted that during the time frame of this alleged scheme, third parties have been posturing for the takeover of the Chamorro Land Trust Commission lease of the Guam International Country Club, which also is held by a Japanese company. That company has been attempting to amend that lease to allow it to convert the Dededo golf course to a solar farm that would benefit both ratepayers and thousands of people waiting to lease CLTC property for homeownership. The lease change, which requires legislative authorization, has been opposed by some businessmen who have claimed to want to keep the property as a golf course. Sources have told Kandit at least one of those businessmen has been attempting to take control of that property along with a phantom broker.
In a matter verifiably tied to Mr. Cho and more closely timed to the alleged Starts scheme, the CNMI’s Department of Public Lands began the process of taking back control of the Rota Resort and Country Club. Mr. Cho held the lease on the property, which has been abandoned and once was the largest business and employer in Rota. DPL in March 2023 began to foreclose on the leaseholder who, according to June 2024 filings in CNMI Superior Court, owed more than $600,000 in lease payments to DPL. The court denied Mr. Cho’s motion to stay the government’s termination of the lease. DPL is preparing to issue a request for proposals for a new leaseholder and potential operator of the hotel and golf course.
Mr. Cho also is or was the owner of Guam Holiday Resort, Alupang Beach Towers, the Garden Villa, Airport Mai’ana Plaza, and other properties in the Marianas, according to the lawsuit.
The amount Mr. Cho needed to cure Rota Resort’s liability to the CNMI government was well below the amount of money he allegedly received through fraud in the Starts deal.
The “True” and “False” purchase agreements
According to the PIGM lawsuit, Mr. Cho wrapped up negotiations with Starts when he accepted its final counteroffer on May 2, 2022 for sale of the property for $19.75 million. The sale had a closing date of September 30, 2022.
Five days later, “Cho misrepresented to Jeong/PIGM that Starts agreed to sell the property for the price of $23,250,000.00 and that closing of the sale would be August 31, 2022.” He allegedly did not disclose the so-called true agreement he brokered five days earlier, which had a closing date of one month later and a sale price of $3.5 million less than what Cho represented to PIGM.
Between Mr. Cho’s representation of the false agreement through the discovery of the alleged fraud, Mr. Jeong had repeatedly requested a face-to-face meeting with Starts officials and with the signed deal from the Starts officials.
“Cho refused to arrange the requested meeting, reiterated that this was the deal being offered by Starts, and told Jeong/PIGM that having direct contact with Starts would jeopardize the deal,” the lawsuit states.
On May 7, 2022, PIGM signed the false agreement allegedly presented by Mr. Cho. On May 20, PIGM began a series of wire transfers to Mr. Cho, starting with a $150,000 payment toward the purchase price and in line with set payments through the false closing date. A month later, on June 22, PIGM wired another $250,000.
“After repeated requests by Jeong/PIGM, Cho on or about June 28, 2022, transmitted via email to Jeong/JIGM … documents which Cho misrepresented were Cho’s deal documents with Starts, and each of which contained the forged signature and misappropriated identity of Starts President Hanako Hata,” the lawsuit states. Those allegedly forged documents included a May 2 commercial property purchase agreement and escrow instructions, and four addenda all dated the same day.
On July 10, 2023, according to the lawsuit, Mr. Hata wrote to Mr. Jeong informing him that Mr. Hata’s signature was forged and that the allegedly forged documents were “never formed part of the transaction contemplated between [Starts] and [Cho].”
Prior to PIGM’s discovery of the alleged fraud, the company wired even more money to Mr. Cho over several wire transfers amounting to $1.1 million, which includes the $400,000 in total mentioned above.
Mr. Cho did not deposit the funds into an escrow account, as was his promise and duty according to the lawsuit.
Crimes
The lawsuit accuses Mr. Cho of crimes. While the forgery is alleged in the lawsuit, it is unclear whether any of the allegedly aggrieved parties have filed any complaint with the FBI or any other law enforcement agency. The lawsuit, however, clearly spells out its allegations of federal crimes committed by Mr. Cho, including wire fraud and theft.
“Cho intentionally misrepresented to PIGM that PIGM’s funds would be deposited into escrow, but Cho instead kept all or some of the funds for himself,” the lawsuit states. It goes on further with this allegation of wire fraud: “Cho used email, telephonic communications, and/or US mail in the commission of Cho’s misconduct.”
One count of wire fraud carries an up-to 10 year federal prison sentence upon conviction. Mr. Cho is accused of several counts of wire fraud.
“Cho’s misconduct was illegal and appears to have violated criminal laws, including but not limited to Theft … Theft by Deception … Theft of Property Held in Trust … Forgery,” the lawsuit states. “In committing the scheme, and in inducing and extracting the referenced contracts, agreements, and payments from PIGM, Cho used or caused to be used interstate and/or international wire communications.”
PIGM is asking for a jury to award the company $1.1 million plus pre- and post-judgment interest for the money Mr. Cho allegedly stole, punitive damages of no less than $5.5 million, other damages to be determined at trial, attorney’s fees, and the rescission and cancellation of the purportedly false agreements.