UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Luca Energy Fund Regional Center & BingQing Yang

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

vs.

Luca Energy Fund Regional Center

BingQing Yang

LUCA INTERNATIONAL GROUP, LLC; LUCA RESOURCES GROUP, LLC; LUCA ENERGY 18 FUND, LLC; ENTHOLPY EMC, INC.; BINGQING YANG; LEI (LILY) LEI; ANTHONY 19 V. POLLACE; and YONG (MICHAEL) CHEN

Filing Date:July 06, 2015

Case:SEC Vs. Luca International Group

Jurisdiction:Federal District Court for the Northern District of California

Status:Resolved

Civil / Criminal:Civil

Cause(s) of Action:

Securities Violations

Description:

The Securities and Exchange Commission has 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.

Files
Jun
07
2015

SEC Charges Oil Company and CEO in Scheme Targeting Chinese-Americans and EB-5 Investors

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.

Luca.pdf
Jun
07
2015

In the Matter of Wisteria Global, Inc. and Hiroshi Fujigami,

ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(b) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND CEASE-AND-DESIST ORDERS

78PDF2.pdf
Sep
06
2018

ORDER GRANTING IN PART AND DENYING IN PART CROSSMOTIONS FOR SUMMARY JUDGMENT

ORDER GRANTING IN PART AND DENYING IN PART CROSSMOTIONS FOR SUMMARY JUDGMENT

Order_on_MSJs_Luca_Yong_Chen.pdf
Aug
10
2018

Mediation Report

Mediation Report

031128756796_Qi_s_settlement.pdf
Attorneys, Regional Centers and Firms
BingQing YangAlice L. JensenLuca Energy Fund Regional Center

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