Only after a year since launching his business, the man had apparently forged bank documents amid struggles over financial difficulties, despite dreaming of running a billion dollar business.
The news comes as an alarming sign for first and second generation Korean-American businesspeople as many of them have been actively seeking employment at start-up companies.
Isaac Choi, 36, was indicted Tuesday on five charges, including telephone banking fraud, stemming from his firm, WrkRiot, a start-up business designed to help people of Silicon Valley to network for potential employment opportunities.
Choi allegedly promoted himself with lies about WrkRiot’s financial capacity as well as his own educational and financial background to seek employees for the company, according to the Department of Justice. He also allegedly forged a bank document as he struggled to pay his employees. WrkRiot has been closed since then, but Choi insisted on falsely informing his employees that he was going to fund the business with foreign investments.
In June 2015, Choi initially founded 1For in Silicon Valley. After employing 20 people, many of whom were Koreans and Chinese, he changed the name of the firm to WrkRiot.
According to the victims, Choi has been telling the employees that he earned his MBA from New York University and that he worked as an analyst for JP Morgan for four years in the past.
However, Choi’s claims were revealed as lies when one of his employees, a marketing director, filed a lawsuit against him for unpaid wages.
“The wages kept getting delayed and once I sued him, I was fired,” said Penny Kim. “As the employees’ frustration continued to grow, [Choi] forged a bank document in August last year and emailed it to all of us.”
Choi was then accused of a bank fraud for forging the documents, prompting FBI and police investigations. That is when it was revealed that he has been presenting false information about himself over the last several years in a desperate attempt to catapult his business into prominence.
“I can’t explain in detail until Choi is proven guilty,” said trial attorney Rush Atkinson. “However, instability stemming from start-up businesses has affected many victims in recent years. Job seekers are advised to be mindful when they’re in the market.”
In fact, what may seem like a bright spotlight that is on many start-ups also casts a dark shadow.
Recent studies have found that only 10 out of 100 start-ups survive after three years since their foundation. An average of only one in every 100 managed to go public within six years.
Not too long ago, prominent start-ups Theranos, game developer Lumo Labs and selfie drone developer Lily Robotics all closed down over financial struggles, false advertisements, and investment frauds.
“What the victims from WrkRiot experienced is probably something many startup employees have faced on many occasions,” said a start-up investor. “They have to understand that startups do manage to get large funding, but they do sometimes tend to rely on money from close family and friends to make ends meet.”
By Yeol Jang