A government official stole $6.7 million from Montgomery County, Maryland, over a six-year period reports the Washington Post.
The IRS discovered the crimes, not Montgomery County. Six years without noticing a bureaucrat stuffing his pockets with $6.7 million? What an embarrassment for high-income and supposedly sophisticated Montgomery County.
Peter Bang was the chief operating officer of the county’s Department of Economic Development. He used the complex financial structures permitted for “economic development” activities to hide his long-running thievery.
In the near term, Bang is going to prison and his bosses should be fired. In the longer term, the solution for this sort of corruption is revealed below.
But first, here is what the Post reported:
Byung Il “Peter” Bang, the former Montgomery County economic development official who admitted to stealing $6.7 million from the county, was sentenced Friday to four years in prison.
In a hearing that stretched for more than two hours, U.S. District Judge Paula Xinis underscored the seriousness of the offense. . . . “This was a purposeful plan that involved the largest theft in Montgomery County history, and I cannot look away from that,” Xinis said.
… “He has arguably put a black mark on Montgomery County,” said Assistant U.S. Attorney Thomas Sullivan, noting that Bang stole from a department tasked with bringing economic development to the Maryland suburb of 1.1 million people. “Are businesses going to come to Montgomery County when they know this type of malfeasance has occurred?”
… But Deputy County Attorney John Markovs, speaking for Montgomery County, called Bang’s crime “a case of public corruption at the highest level.”
… As the chief operating officer of the county’s Department of Economic Development, Bang directed the creation of a fake company — the Chungbuk Incubator Fund LLC — then directed millions in county funds to it, court records show.
He used the money for his personal benefit, prosecutors said, gambling with hundreds of thousands of dollars at casinos across the country.
Bang was the only one charged in the scheme, which ran from 2010 until 2016, when his department was disbanded and he was moved to the county’s finance department. The theft was discovered by the Internal Revenue Service, which began investigating Bang’s activity at casinos after he wouldn’t disclose the source of the large cashier’s checks he brought with him to gamble.
The solution for Montgomery County and other governments is to abolish their “economic development” activities altogether. That would reduce corruption and save policymakers from embarrassments such as Amazon in New York and Foxconn in Wisconsin. The way forward is to run simple, transparent, and lean governments while keeping taxes low. Economic development would take care of itself.
NBC provides further details on Bang’s crimes:
In 2010, the county partnered with a province in South Korea to create an incubator fund, apparently to support the growth of Korean-run businesses in the county. In July of that year, Bang incorporated a company called Chungbuk Incubator Fund LLC and opened four bank accounts in the company’s name. He listed his home address as the address of the company, and gradually directed the funds to the accounts. The Montgomery County Department of Finance transferred more than $5.4 million. The Maryland Economic Development Corporation transferred more than $1.2 million. And the Maryland Conference & Visitors Bureau transferred more than $43,000.
This last bit in the NBC story is classic: “County officials said they will increase oversight so no one is ever able to steal this much for this long again.”
They never thought of oversight before? Six years and county auditors never examined the Chungbuk Incubator Fund? What an insult to taxpayers.