Federal authorities accused a 40-year-old Wisconsin woman of defrauding multiple investors out of more than $16 million, reports the Pioneer Press.
Prosecutors say Kay Yang told the mostly Hmong American investors that she would put their money in “stocks and foreign currency trading.”
According to the U.S.Securities and Exchange Commission, many of these investors did not speak English as their first language and were not experienced with investing.
Yang, who is the Vice President of 5XEN Inc. – a Supermarket in Milwaukee – was blamed with deceptive use of these funds. Court documents examined by TMJ4 indicate the SEC alleges that out of this $16.5 million, Yang spent:
- Only $7.1 million on foreign exchange trading
- $4 million on personal expenses, including $3 m on real estate, living expenses, travel and luxury cars. This included funding over $500,000 on trips to Maui, Thailand and a luxury cruise. It also included over $300,000 spent on a Lexus, a Tesla and two BMWs.
- $3.3 million on Yang’s business expenses
- $400,000 to repay investors of a previous venture.
The SEC named Yang’s husband, Chao Yang, as complicit in the fraud. The couple is accused of lying to the SEC with fake account statements that showed “profitable trading in 2019.”
Many of these statements had been altered to inflate profits.
The Wisconsin Department of Financial Institutions ordered a repayment of $17 million to the investors, of which little has been paid back.
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The couple is found to have continued with raising funds from the Hmong American community for a new venture called the “Xapphire G Fund”. It has not yet been determined whether this is a real investment fund or another Ponzi scheme.
Yang has also been involved in a separate legal matter with Hmong College Prep Academy, a charter school in Minnesota. Yang directed the founder of this school, Christianna Hang, to a London-based hedge fund. Hang invested $5 million of the schools’ funds, of which now only $700,000 remains. The London fund blamed the “bad timing of the coronavirus pandemic” for much of this loss.
According to the SEC, none of Yang’s investors received any significant returns and many of them lost their entire investments.
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