A Suspicious Exercise Report (SAR) filed by HSBC reveals that, even after WCM777 was shut down by US authorities, the financial institution authorized tens of hundreds of thousands in transfers.
WCM777 was a Ponzi scheme run my Phil Ming Xu, who on the time was residing in California.
After confirming their enterprise mannequin was unlawful, WCM777 rebranded as Kingdom777 in January 2014.
The SEC shut down WCM777 three months later in March.
Xu settled with the SEC in September 2014.
The settlement noticed Xu stripped of funds obtained by way of WCM777. An injunction additionally barred him from committing additional acts of fraud.
Xu’s companion, Zhi Tiger Liu, who’s believed to have run off to China with $20 to $30 million, was by no means apprehended.
As per the FinCEN Recordsdata leak, between 2013 and 2014 three WCM777 associated SARs had been filed.
The transactions reported amounted to $30.6 million {dollars}.
HSBC was the reporting financial institution. But regardless of submitting three SARs and the SEC shutting WCM777 down in January 2014, HSBC saved WCM777’s accounts open till April 2014.
Investor funds had been laundered by way of HSBC’s Hong Kong accounts. By the point HSBC shut them down, they’d been all however cleared out.
After settling with the SEC Xu fled to China.
He relaunched WCM777 as World Capital Market and resumed scamming Chinese language buyers.
In 2016 Chinese language authorities arrested Xu on monetary fraud costs.
Regardless of admitting fraud in his settlement with the SEC and subsequent arrest in China, Xu maintains his innocence.
When he was contacted by ICIJ for touch upon the FinCEN Recordsdata leak, Xu (proper) acknowledged;
I used to be misled by my lawyer to settle, which is in opposition to my coronary heart.
My hear [sic] is pure for Kingdom. My imaginative and prescient is compromised.
First, WCM777 was promoting good cloud merchandise, not securities; by way of MLM construction.
SEC did the improper factor to cost us and created massive damages to me and my firm. I request the SEC to compensate me for my loss.
Second, I offered WCM777 for $1 … I’ve given the gross sales contract to the SEC.
Third, I believed my private rights are infringed by SEC and SEC plundered me with out righteous procedures.
Protected from US authorities’ attain in China, it’s simple for Xu to try to rewrite historical past.
BehindMLM reviewed WCM777 and concluded it was a Ponzi scheme in June 2013.
Our analysis was confirmed by forensic evaluation by the court-appointed WCM777 Receiver two years later.
The FinCEN Recordsdata are a collection of leaked SARs initially offered to BuzzFeed.
BuzzFeed shared the leak with ICIJ and different organizations, who collectively processed the leaked data for publication.
Sadly a choice has been made not to share the complete experiences. As such now we have to depend on redacted reporting for now.