'Betrayal of trust' could cost locals $20M

Regulators shut down Brentwood financial advisor with clients ranging from millionaires to Palm waiters; 'It became necessary for me to retain counsel last week'

Email | Print By Ken Whitehouse and Geert De Lombaerde

Michael Park's visage at the Palm

A Brentwood financial advisor has filed to liquidate his assets after signs of a massive fraud led his brokerage to pull his license and regulators to shut down his firm.

The still-unfolding tale of Michael Jin Yong Park involves some of the area’s most exclusive golf courses, a shiny new Brentwood mansion and investors who say their losses could reach $20 million.

Some of those investors have told NashvillePost.com how Park, a representative of Florida-based 1st Discount Brokerage and chief of Park Capital Management Group and PCMG Lending, courted them at The Governor’s Club, Golf Club of Tennessee and other prestigious area clubs. Park also frequented The Palm restaurant in downtown Nashville and recruited more than a dozen of the waiters there to his investment scheme.

Today, all of them have nothing to show for their investment.

Scott Denney, general manager of The Palm, told NashvillePost.com today that he was among those who lost money.

“It’s a terrible shame. It really hurts because we thought he was one of us,” he said. “We took care of him and he was loved by the staff. While it probably was only a couple of thousand dollars for us, it’s in the millions for others. This is not a life-changing event for our staff, but it was money stolen from our families. Some were using the money for college funds for their children. It is a betrayal of trust. We are seeking counsel.”

Investors today began receiving letters from Park stating that their accounts at Park Capital have “no current liquid value” and that investigators from the Securities and Exchange Commission might contact them.

“I want you to know that it was not my intention nor did I ever think that things would come to this end,” Park wrote in the letter. “But it became necessary for me to retain counsel last week and we are still in the process of evaluating these circumstances.”

How the money disappeared is not clear. But a year-old court case sheds some light on Park’s investment strategies and past run-ins with regulators. In that case, a Franklin resident sued Park and 1st Discount for losing more than $26,000 by making unapproved trades, churning his account and investing in high-risk penny stocks without approval. The suit also claims Park has been the target of at least two other allegations of churning and charging excessive commissions.

Officials at 1st Discount could not be reached for comment today. The company’s office closed for the day early this afternoon.

Recent events appear to herald a dizzying fall from grace for Park, who by all accounts is living a swanky life that includes a new $1.7 million home in Maryland Farms and a Mercedes worth more than $100,000 he has since sold back to Mercedes-Benz of Nashville. On his regular visits to the Palm, he often tipped his waiters more than 40 percent.

On July 3, two days after Park filed for Chapter 7 and listed assets of less than $50,000, a groundskeeper was tending to his home just off Old Hickory Boulevard.

Whether that lifestyle was and is being funded with his clients’ cash is still unclear. But things began to unravel recently when a client called him to move some of his assets. When a hesitant Park told him it would take several weeks to procure the funds, red flags were raised.

Those red flags turned into full-fledged alarm bells just last week, when Park was with friends at the Porsche Sport Driving School at Barber Motorsports Park near Birmingham. He received a call from his office telling him 1st Discount officials were there examining his papers. Sources said he all but vanished from the racecourse and headed back to Nashville.

Soon after, several of Park’s investors and friends confronted him about their situation. According to them, Park responded with a plea to give him a little bit of time to clear up the mess. This past Tuesday – less than a week later – he filed for bankruptcy. The 1st Discount examiners also pulled his license.

It’s not clear how much money is involved in the pending fraud allegations against Park, but sources said it’s at least $8 million and could be as much as $20 million.

Law enforcement and securities regulators already are on Park’s trail. Ricky Watson, Brentwood’s chief of police, said he is aware of the Park situation and has referred the matter to the FBI and SEC.

Those filings will soon have company in District Court. Several of Park’s investors told NashvillePost.com they are planning to file suit next week against 1st Discount Brokers.

Park’s alleged actions echo the tales of Rutherford County philanthropist Bob McLean and Barry Stokes of benefits firm 1Point Solutions before him. A year ago, McLean was accused of misappropriating various promissory notes. That case led to him committing suicide last September and the trustee overseeing his bankruptcy suing investors to recover what he says were improper interest payments.

NashvillePost.com will update this story as more information becomes available.