SEC Charges Oil Company and CEO in Scheme Targeting Chinese-Americans and EB-5 Investors
summary
Bingqing Yang, CEO of Luca International Group, orchestrated a $68 million Ponzi-like scheme targeting Chinese-American and Asian investors, including EB-5 visa seekers, by falsely claiming profitable oil and gas operations, promising 20–30% returns, and diverting funds for personal luxuries, leading to SEC charges and settlements with associates and brokers.
paragraph
The SEC charged Bingqing Yang and her company Luca International Group with operating a $68 million Ponzi scheme that preyed on Chinese-American and Asian investors, including those seeking EB-5 visas, by falsely portraying the company as a profitable oil and gas operation with vast reserves and promising annual returns of 20–30%. Yang diverted $2.4 million in investor funds to purchase a $2.4 million home in Fremont, pay for personal taxes, pool and gardening services, and a Hawaii vacation, while using new investor money to make sham payments to earlier investors. She also misled EB-5 investors by claiming their $8 million was secured by solvent oil projects, when the underlying entities were deeply insolvent; Yang’s associates Lei Lei and Michael Chen were charged for aiding the fraud, while former CFO Anthony Pollace settled for a $25,500 penalty and brokers Hiroshi Fujigami and Wisteria Global agreed to disgorge $1.1 million and face industry bans.
narrative
Bingqing Yang, CEO of Bay Area-based Luca International Group, orchestrated a $68 million Ponzi-like scheme that targeted the Chinese-American community and Asian investors, including those seeking U.S. permanent residency through the EB-5 Immigrant Investor Program. Yang falsely represented the company as a thriving oil and gas operation with millions of barrels of oil and billions of cubic feet of gas reserves, promising investors annual returns of 20–30%, despite knowing the company was deeply in debt and earning no profits. She used funds from new investors to pay sham returns to earlier investors, commingled assets to conceal the scheme’s collapse, and diverted $2.4 million to purchase a 5,600-square-foot home in Fremont, pay personal taxes, fund a family vacation to Hawaii, and cover household services. Yang specifically misled EB-5 investors by claiming their $8 million investment was secured by loans to eight oil and gas drilling projects, when in reality the recipient entities were insolvent and incapable of repayment. Former VP Lei (Lily) Lei and fundraiser Yong (Michael) Chen were charged for actively soliciting investors and aiding fund diversion, while former CFO Anthony Pollace settled for a $25,500 penalty for a minor role. Brokers Hiroshi Fujigami and Wisteria Global agreed to disgorge over $1.1 million in ill-gotten gains and were barred from the securities industry and penny stock offerings. The SEC’s investigation, conducted with international assistance from agencies in Hong Kong and China, is being litigated in federal court in San Francisco.
Classified affinity-fraud(confidence 90%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →
Parties
Bingqing Yangjina l. choiluca entityluca internationalsec’s complaintsec’s investigationsec’s litigationSecurities and Exchange Commission
Keywords
investorsyangluca internationalsecinvestor fundslucaoilcompanyeb-securitiesinvestorinternationalschemegasfunds
Exhibits & Attached Documents (2)
Extracted insights
Dollar amounts 5
- $68.00M $68 million $10M–$100M
- $8.00M $8 million $1M–$10M
- $2.40M $2.4 million $1M–$10M
- $1.10M $1.1 million $1M–$10M
- $26K $25,500 $10K–$100K
Entities 8
- person Bingqing Yang
- person jina l. choi
- person luca entity
- person luca international
- agency sec’s complaint
- agency sec’s investigation
- agency sec’s litigation
- agency Securities and Exchange Commission
Triples 25
- Securities and Exchange Commission Charged Bay Area oil and gas company and its CEO with running a $68 million Ponzi-like scheme and affinity fraud
- SEC Alleges Bingqing Yang knew that Luca International Group was earning no profits and sinking under a mountain of debt
- Bingqing Yang Made Presentations To investors portraying a successful oil and gas operation with millions of barrels of oil reserves and billions of cubic feet in gas reserves
- Bingqing Yang Projected Outsized investment returns ranging from 20 to 30 percent annually
- Bingqing Yang Commingled Investor funds to prevent the scheme from collapsing
- Bingqing Yang Used Money from new investors to make sham profit payments to earlier investors
- Bingqing Yang Diverted $2.4 million in investor funds through her brother’s company in Hong Kong purportedly for the purchase of an oil rig
- Bingqing Yang Used $2.4 million in investor funds to purchase a 5,600-square-foot home in an exclusive gated community in Fremont, Calif
- Bingqing Yang Spent Investor funds on pool and gardening services, personal taxes, and a family vacation to Hawaii
- SEC’s complaint Was filed in Federal court in San Francisco
- Luca International Conducted Seminars for investors at the company’s offices and hotel conference rooms in California
- Yang and Luca International Targeted Chinese citizens who sought permanent U.S. residence through the EB-5 program
- Yang Raised Approximately $8 million from EB-5 investors purportedly to finance jobs and development costs for eight oil and gas drilling projects
- Yang Told These investors that the loan was fully secured
- Luca entity Was Hopelessly in debt and had no realistic possibility of ever repaying the loan
- Jina L. Choi Stated Yang falsely claimed that Luca International was a profitable oil and gas drilling operation when it was really a Ponzi-like scheme preying on Chinese-Americans and EB-5 investors who lost millions of dollars while Yang lined her pockets
- Lei (Lily) Lei Sold Securities to investors and helped Yang divert investor funds
- Yong (Michael) Chen Raised Investor funds for Yang through his company Entholpy EMC
- Luca International’s former CFO Anthony Pollace Agreed to pay A $25,500 penalty to settle charges that he played a small role in the alleged fraud
- Hiroshi Fujigami and his company Wisteria Global Agreed to settle Charges that they acted as brokers to illegally sell securities of two Luca entities
- Fujigami and Wisteria Must disgorge Allegedly ill-gotten gains of more than $1.1 million
- Fujigami Agreed to be barred From the securities industry and from participating in any penny stock offering
- SEC’s investigation Was conducted by Alice Liu Jensen and Michael D. Foley of the San Francisco office
- SEC’s litigation Will be led by Ms. Jensen, Sheila O’Callaghan, and John S. Yun
- SEC Appreciates the assistance of The U.S. Citizenship and Immigration Services, the Financial Industry Regulatory Authority, the Hong Kong Securities and Futures Commission
PDF (from attached: complaint)
Text layers
Extracted body text (4,049c)
The Securities and Exchange Commission today charged a Bay Area oil and gas company and its CEO with running a $68 million Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, including some solicited as part of the EB-5 Immigrant Investor Program. The SEC alleges that Bingqing Yang knew that Luca International Group was earning no profits and sinking under a mountain of debt, yet she made presentations to investors portraying a successful oil and gas operation with millions of barrels of oil reserves and billions of cubic feet in gas reserves. Yang falsely projected outsized investment returns ranging from 20 to 30 percent annually. She allegedly commingled investor funds to prevent the scheme from collapsing and used money from new investors to make sham profit payments to earlier investors. Yang also allegedly diverted $2.4 million in investor funds through her brother’s company in Hong Kong, purportedly for the purchase of an oil rig, but instead used it to purchase a 5,600-square-foot home in an exclusive gated community in Fremont, Calif. In addition, Yang allegedly spent investor funds on pool and gardening services, personal taxes, and a family vacation to Hawaii. According to the SEC’s complaint filed in federal court in San Francisco, Luca International conducted seminars for investors at the company’s offices and hotel conference rooms in California. Besides targeting investors in the Chinese-American community through advertisements in Chinese-language television, radio, and newspaper outlets, Yang and Luca International allegedly zeroed in on Chinese citizens who sought permanent U.S. residence through the EB-5 program, which provides a way for foreign investors to obtain a green card by meeting certain U.S. investment requirements. Yang is alleged to have raised approximately $8 million from EB-5 investors purportedly to finance, through a loan to another Luca entity, jobs and development costs for eight oil and gas drilling projects. Yang allegedly told these investors that loan was fully secured, but the Luca entity the EB-5 investors funded was hopelessly in debt and contrary to the rosy representations Yang made to investors, had no realistic possibility of ever repaying the loan. “As alleged in our complaint, Yang falsely claimed that Luca International was a profitable oil and gas drilling operation when it was really a Ponzi-like scheme preying on Chinese-Americans and EB-5 investors who lost millions of dollars while Yang lined her pockets,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. Others charged in the SEC’s complaint include Luca International’s former vice president of business development Lei (Lily) Lei, who allegedly sold securities to investors and helped Yang divert investor funds, and Yong (Michael) Chen, who allegedly raised investor funds for Yang through his company Entholpy EMC, which did business under the name Mastermind College Funding Group. Luca International’s former CFO Anthony Pollace agreed to pay a $25,500 penalty to settle charges that he played a small role in the alleged fraud. As part of a related administrative action instituted today, Hiroshi Fujigami and his company Wisteria Global agreed to settle charges that they acted as brokers to illegally sell securities of two Luca entities. Fujigami and Wisteria must disgorge allegedly ill-gotten gains of more than $1.1 million and Fujigami agreed to be barred from the securities industry and from participating in any penny stock offering. The SEC’s investigation was conducted by Alice Liu Jensen and Michael D. Foley of the San Francisco office and supervised by Steven D. Buchholz. The SEC’s litigation will be led by Ms. Jensen, Sheila O’Callaghan, and John S. Yun. The SEC appreciates the assistance of the U.S. Citizenship and Immigration Services, the Financial Industry Regulatory Authority, the Hong Kong Securities and Futures Commission, and the China Securities Regulatory Commission.
OCR text (4,049c · plain-text · 99% conf)
The Securities and Exchange Commission today charged a Bay Area oil and gas company and its CEO with running a $68 million Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, including some solicited as part of the EB-5 Immigrant Investor Program. The SEC alleges that Bingqing Yang knew that Luca International Group was earning no profits and sinking under a mountain of debt, yet she made presentations to investors portraying a successful oil and gas operation with millions of barrels of oil reserves and billions of cubic feet in gas reserves. Yang falsely projected outsized investment returns ranging from 20 to 30 percent annually. She allegedly commingled investor funds to prevent the scheme from collapsing and used money from new investors to make sham profit payments to earlier investors. Yang also allegedly diverted $2.4 million in investor funds through her brother’s company in Hong Kong, purportedly for the purchase of an oil rig, but instead used it to purchase a 5,600-square-foot home in an exclusive gated community in Fremont, Calif. In addition, Yang allegedly spent investor funds on pool and gardening services, personal taxes, and a family vacation to Hawaii. According to the SEC’s complaint filed in federal court in San Francisco, Luca International conducted seminars for investors at the company’s offices and hotel conference rooms in California. Besides targeting investors in the Chinese-American community through advertisements in Chinese-language television, radio, and newspaper outlets, Yang and Luca International allegedly zeroed in on Chinese citizens who sought permanent U.S. residence through the EB-5 program, which provides a way for foreign investors to obtain a green card by meeting certain U.S. investment requirements. Yang is alleged to have raised approximately $8 million from EB-5 investors purportedly to finance, through a loan to another Luca entity, jobs and development costs for eight oil and gas drilling projects. Yang allegedly told these investors that loan was fully secured, but the Luca entity the EB-5 investors funded was hopelessly in debt and contrary to the rosy representations Yang made to investors, had no realistic possibility of ever repaying the loan. “As alleged in our complaint, Yang falsely claimed that Luca International was a profitable oil and gas drilling operation when it was really a Ponzi-like scheme preying on Chinese-Americans and EB-5 investors who lost millions of dollars while Yang lined her pockets,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. Others charged in the SEC’s complaint include Luca International’s former vice president of business development Lei (Lily) Lei, who allegedly sold securities to investors and helped Yang divert investor funds, and Yong (Michael) Chen, who allegedly raised investor funds for Yang through his company Entholpy EMC, which did business under the name Mastermind College Funding Group. Luca International’s former CFO Anthony Pollace agreed to pay a $25,500 penalty to settle charges that he played a small role in the alleged fraud. As part of a related administrative action instituted today, Hiroshi Fujigami and his company Wisteria Global agreed to settle charges that they acted as brokers to illegally sell securities of two Luca entities. Fujigami and Wisteria must disgorge allegedly ill-gotten gains of more than $1.1 million and Fujigami agreed to be barred from the securities industry and from participating in any penny stock offering. The SEC’s investigation was conducted by Alice Liu Jensen and Michael D. Foley of the San Francisco office and supervised by Steven D. Buchholz. The SEC’s litigation will be led by Ms. Jensen, Sheila O’Callaghan, and John S. Yun. The SEC appreciates the assistance of the U.S. Citizenship and Immigration Services, the Financial Industry Regulatory Authority, the Hong Kong Securities and Futures Commission, and the China Securities Regulatory Commission.