Rowland Heights woman, former Hacienda Heights couple among five accused of running $30 million pyramid scheme

LOS ANGELES >> A federal grand jury Thursday indicted a Rowland Heights woman, a former Hacienda Heights couple and two other defendants who are accused of running a $30 million pyramid scheme targeting Chinese communities on both coasts, authorities said Friday.
Wen Chen “Wendy” Lee, 53, of Rowland Heights; Cheong Wha “Heywood” Chang, 47, of Taiwan and a former resident of Hacienda Heights; Chang’s wife Toni Chen, 46; Dalian “David” Guo, 53, of Hyde Park, New York; and Chih Hsuan “Kiki” Lin, 50, of Los Angeles and La Vegas are each charged with 13 counts of wire fraud and one count of conspiracy, U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
The five operated a Hong Kong-based company known as CKB, WIN169 Biz Solutions Ltd., CKB168 Ltd. and Cyber Kid Best Education Limited, officials said.
The company purported to run a profitable business selling online educational courses for children, “but in reality was a pyramid scheme designed to generate new revenue by adding new investors,” Mrozek said.
Prosecutors allege the defendants collected about $30 million from investors, primarily in Chinese-American communities in Los Angeles, San Francisco and New York City between 2011 and 2014. They kept about $6.5 million of the money for themselves and transferred the rest to others involved in the scheme, according to the indictment.
“We believe that over 1,000 people invested in CKB, though it is unclear how many of those people invested directly through the defendants charged in this case,” Assistant U.S. Attorney Stephen Goorvich said.
To lure investors into the scam, the defendants made numerous false promises and statements about CKB, which was not registered with the U.S. Securities and Exchange Commission, authorities said.
All five defendants are expected to appear in court to enter pleas next month, Mrozek said. They were arrested earlier this month following the filing of a sealed criminal complaint, Mrozek said.
Lin, who is also accused in the indictment of threatening victims in order to collect funds and dissuade them from talking to authorities, is being held without bond, while the others have been freed on bonds ranging from $250,000 to $500,000. If convicted as charged, each defendant faces up to 265 years in federal prison.

Facebook Twitter Reddit Tumblr Linkedin Email
  • mexicanoduro

    I know someone who lost $40,000.