Residents of San Francisco Chinatown have been caught up in a multi-millionaire dollar Ponzi scheme.
According to CBS News, authorities estimate that a $39 million Ponzi scheme run by Derek Chu of Alamo has claimed over 100 victims. They say that from 2013 to 2020 he conned victims into investing in a fake scheme to buy and resell tickets to luxury suites at Oracle Arena, Staples Center and Chase Center.
Authorities also say Chu paid investors back by mixing his personal and business accounts with investor funds, KRON 4 reports. He is also accused of using $7.3 million of investor funds to pay off personal expenses like travel, luxury automobile and jewelry. The money was also used to pay bills and pay off credit card debts.
According to The Daily Beast, Chu’s father Felix Chu was involved in the scheme. Felix is a well-known insurance agent in Chinatown who is also at the center of a fraud case. He is accused of convincing elderly people to use their retirement funds to purchase promissory notes. The notes were issued by Felix and Derek, who eventually stopped paying interest on the notes.
Attorney Jaynry Mak represents several of the victims, CBS News reports. Mak says several of the victims are Chinatown residents.
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“We believe the first round is Chinese, monolingual seniors. Because many of these victims are seniors they went through emotional abuse from this. Some were suicidal,” Mak told ABC 7 San Francisco.
One of Chu’s victims spoke to ABC 7 San Francisco about their experience.
“You feel ashamed, you feel violated, you feel embarrassed. You feel afraid,” Kingsley, whose 76-year-old mother Ellen signed over her house during the scheme, told ABC 7 San Francisco.
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