Gene Kwon, once one of the Wasatch Front’s most prominent restaurateurs, was in the Salt Lake County jail Tuesday awaiting a spot in prison, his business empire only a memory.
Several years after he entangled friends and others in a trail of fraudulent loans, Kwon, 45, was sentenced last week to one to 15 years on his guilty pleas to one count of theft, three counts of securities fraud and a pattern of unlawful activity, all second-degree felonies.
Third District Judge Judith Atherton ordered the prison terms to run concurrently.
“Justice has been served,” said Ray Unrath, who had loaned Kwon money. “He lied to me with respect to the use of the funds I loaned him. The investment represented to me was fictitious, and it went on for a number of years. His claim that he simply got in over his head is clearly not the case, in my situation.”
On Tuesday, Kwon’s attorney, Marcus Mumford, said his client “remains upbeat and is determined to do whatever he can to make things right.”
Kwon said in December that he pleaded guilty to the charges “to take ownership of what I’ve done — I am very sorry.”
“I have learned many things from this,” a tearful Kwon said after that hearing. “I’ve learned to be up-front. Some of these people were my best friends.”
Kwon had seemed wildly successful in early 2000, opening upscale eateries, owning historic buildings and operating some of Utah’s most popular restaurants. But almost from the onset, he was taking out loans to stay afloat, even as he opened more restaurants.
By 2006, Kwon had expanded his operations from five to 11 eateries, while actively developing six more establishments in Nevada, Washington, Park City, San Francisco and Boise.
During that same time, Kwon raised $2.7 million from seven Utah investors, prosecutors say. He offered promissory notes, telling friends they would have a substantial profit with little or no risk. But he did not disclose that he had been named in numerous tax liens from 1998 and continuing through 2003 totaling hundreds of thousands of dollars.
Creditors accused Kwon of squandering money on fast cars and exclusive country clubs. His attorney said Kwon lived the life “you’d expect a successful individual to live.”
Kwon’s restaurant career began in 1991 when he started running his family’s Mikado restaurant in downtown Salt Lake City. Within four years, he opened a second restaurant in Salt Lake and a third in Park City. He eventually owned several restaurants and had title to six commercial buildings. In 2005, he was named the Ernst & Young Entrepreneur of the Year, about the time he began turning to his friends for loans.