The SEC announced on Thursday charges against five firms involved in a global pyramid scheme that falsely promised risk-free returns to investors in Asian-American communities in New York, California and other areas.
The SEC alleges that the companies, which are based in Hong Kong, Canada and the British Virgin Islands, have—through the efforts of three executives, including Rayla Melchor Santos, Hung Wai “Howard” Shern and Rui Ling “Florence” Leung—stolen over $20 million from U.S. investors and millions more from investors in other countries using a venture that purportedly sells web-based children’s educational courses.
According to the complaint, the scheme’s efforts targeted connections between members of the Asian-American community using internet videos, promotional material and seminars to create the appearance of a legitimate business.
Bank records indicate that most of the money raised through new investors has been directed to accounts held by executives of the collective operative CKB and CKB168, as well as in commissions to promoters of the scheme.
The court granted the SEC’s request for an asset freeze for both CKB companies and the operators and promoters charged in the complaint, including Rui Ling, Hung Wai and Santos, as well as promoters Daliang “David” Guo, Yao Lin, Chih Hsuan “Kiki” Lin, Wen Chen “Wendy Lee” Hwang, Toni Tong Chen, Cheongwha “Heywood” Chang, Joan Congyi Ma and Heidi Mao Liu.
“CKB’s operators and promoters profited by abusing relationships of trust within the Asian-American community and promising investors they can earn more money by recruiting other investors instead of selling actual products,” Antonia Chion, an associate director in the SEC’s enforcement division, said. “What CKB really sells is the false promise of easy wealth.”