It’s been roughly 4 and a half years, however John Wuo’s involvement within the USFIA Ponzi scheme has lastly been defined.
BehindMLM got here throughout John Wuo, a former Mayor of Arcadia after which present Metropolis Council member, by analysis for our USFIA evaluate (revealed June 2015).
Arcadia is a metropolis in Los Angeles County, California. USFIA was a rip-off that duped buyers by its GemCoin Ponzi factors scheme.
Wuo appeared at a number of USFIA occasions held in Arcadia, to endorse the scheme and proprietor Steve Chen (proper).
Our analysis was rapidly picked up by native media, which in flip result in heated confrontations between indignant residents and Wuo.
On the time Wuo claimed he didn’t “know something about GemCoin”. Regardless of that, the disgraced politician finally resigned in October 2015.
To today Wuo (proper) maintains
he has no monetary curiosity in and hasn’t obtained any compensation from the businesses related to Gemcoin, neither is he a Gemcoin investor.
Seems, in all probability to not anybody’s shock, that’s a lie.
The SEC sued USFIA for being a Ponzi scheme in September 2015, roughly three months after our evaluate was revealed.
As a part of that lawsuit, a USFIA Receivership was established.
Heading up the Receivership is courtroom appointed Receiver Thomas Seaman.
Final month the USFIA Receiver revealed a forensic accounting report. The report, which examines the movement of cash inside USFIA, was made public on the Receivership web site yesterday.
As per the Receiver’s report, John Wuo obtained $1.805 million from USFIA and its associated firms.
The Receiver couldn’t confirm why the cash was paid to Mr. Wuo.
Primarily based on his political place on the time, look at USFIA occasions and public endorsements, why Wuo obtained virtually $2 million ought to be apparent.
Whether or not Wuo has returned the stolen investor funds he obtained from Chen is unclear.
To one of the best of my data, the one direct monetary repercussion Wuo has confronted is a $2000 high quality issued in 2016.
Wuo is seemingly nonetheless energetic within the Arcadia political sphere. Following complaints from residents, final November it emerged Wuo’s residence was engaged in voter fraud.
Exterior of Wuo, the movement of cash inside USFIA is typical of MLM Ponzi schemes.
The Receiver’s forensic accounting investigation tracks USFIA funds from January 1st, 2010.
Through the interval examined, USFIA took in no less than $197 million {dollars} from duped buyers.
Proof recommended further funds had been transferred from abroad buyers to offshore financial institution accounts, nevertheless the Receiver hit a brick wall following these leads up.
The Receiver … confronted important points with regard to each a number of languages and abroad monetary establishments.
The shortage of cooperation from these establishments and the language points posed further limitations on the Receiver’s full understanding of the scope of this scheme.
To the extent that funds had been raised and spent outdoors america, the true extent of Chen’s fraudulent scheme can’t be absolutely identified.
Of the $197 million invested in USFIA, Steve Chen appropriated $49.4 million to spend on himself, family and friends.
Chen spent one other $45.5 million on real-estate, once more instantly benefiting himself, family and friends.
In distinction, USFIA paid out simply $1.7 million in returns to its buyers. ANother $14.4 million was paid in recruitment commissions.
As specified by the Recevier’s Forensic Account Report, right here’s the place cash invested into USFIA went:
- Steve Chen pocketed $4.03 million and spent $1.1 million to fund his way of life
- Yan Chen (Steve Chen’s brother) obtain no less than $9.1 million
- Amauction, a shell firm owned by Steve and Yan chen, obtained no less than $18.2 million
- Ammine SRL, a shell firm managed by Yan Chen, obtained ~13.2 million
- Oliva Alvarez Lam, liable for organising USFIA shell firms within the Dominican Republic, was paid $220,568
- Chenne Company, a jewellery supplies enterprise owned by Yaqin Chao, Yan Chen’s spouse, obtained $3.59 million
- over $11 million was paid to different jewellery supplies firms owned by Yan Chen and his spouse, for instance $3.9 million was paid to Shiny Stones
- Wei He, Steve Chen’s ex-wife and father of considered one of his sons, obtained $1.5 million
- ~$10 million was additionally used to buy residential properties for He
- Li Zhao (aka Jennifer Zhao, Steve Chen’s former girlfriend (?) and mom of considered one of his sons), obtained $3.8 million
- $3.2 million was paid to Ally Investments, a shell firm owned by Li Zhao
- $2.34 million was spent on a property Li Zhao held title to
- Luyang Li (Steve Chen’s present spouse and mom of two of his youngsters), obtain $295,722
- Mo Chen (considered one of Steve Chen’s sons), obtained $558,341
- $200,000 was paid to CMP Capital Funding, an actual property enterprise, on the course of Mo Chen
- Qun Yang (believed to be one other of Steve Chen’s girlfriends), obtained $1.3 million – she was additionally the beneficiary of two bought residential Arcadia properties
- Eiji Sakurada (aka Solomon Yand and Solomon Sakurada, a enterprise accomplice of Steve Chen’s), obtained $3 million
- $10 million was spent on what seems to be a resort development ruse between Chen and Sakurada
- one other $45.5 million was spent on USFIA associated properties (most of which have since been liquidated by the Receivership)
Along with these tracked funds;
Important funds had been made to company entities with solely tenuous connections to the Receivership Entities.
Many of those entities had been situated in international international locations which restricted the Receiver’s means to hint or get better proceeds.
- $4 million was paid to American Immigration Seek the advice of LTD, a Hong Kong shell firm whose financial institution accounts are beneath the management of Steve and Yan Chen
- $3.1 million was paid to AMN LTD, one other Hong Kong shell firm beneath the management of Steve Chen
- $4.6 million was paid to Amkey Worldwide Entitites, a aspect MLM enterprise spanning Korea, Taiwan, Vietnam and Malaysia (run by Mo Chen and operated at a loss)
- $27.5 million was spent working USFIA and its related shell firms ($3.39 million promotional conferences, $4.92 million on journey bills and many others.)
- $11.5 million was spent on faux jewellery to dupe USFIA buyers with
- $8.3 million was spent on amber, once more to dupe buyers with
- $6 million was given to Vecast Inc., a defunct firm managed by George Wu
- $5.4 million was spent on treasured stones (diamonds, rubies and emeralds), the overwhelming majority of which stay unaccounted for
- $350,585 was spent on bank cards related to USFIA
In whole Steve Chen laundered some $95 million between twenty-eight recognized USFIA associated shell firms.
Within the conclusion of his report, the Receiver notes;
The monetary information of the Receivership Entities point out Chen’s scheme to defraud purported buyers of almost $200 million was huge, and remarkably, it seems that apart from just a few individuals, not one of the buyers obtained any return on their funding.
Nor may buyers have earned a return as a result of their capital was by no means deployed for so-called Gemcoins or some other crypto-currency.
As a substitute, Chen and his dependents, family members and associates, misappropriated just about the entire cash to assist their lavish existence in addition to for his or her private actual property and different assorted ventures.
Chen by no means created a crypto-currency backed the worth of huge portions of amber and different treasured stones.
This, like all the enterprise, was merely a gross sales pitch directed to unwitting buyers each in america and overseas.
Steve Chen’s present standing and whereabouts are unknown. Thus far he has solely confronted civil prices in relation to USFIA associated fraud.