High Velocity Fraud

$150.0 million

Pomona, CA

2005 - 2018

Yin Nan “Michael” Wang and Wendy Ko are the subjects of a fraudulent real estate investment investigation brought by the Securities and Exchange Commission (“SEC”). The SEC alleges that between 2005 and 2013 the two raised over $150 million from approximately 2,000 investors through their company Velocity Investments Group (“VIG”).

The SEC accuses Wang and Ko of operating a Ponzi scheme and state that Wang admitted to paying quarterly returns for older investors with new investors’ money. Further, Wang is accused of falsifying income figures he sent to his outside accountant and advertised on his website to make Velocity Investments Group appear more profitable.

The SEC’s complaint also alleges that from 2007-2013 Wang and Ko made a large number of superfluous transfers between VIG’s several accounts and another company which they operated, Rockwell Realty Management, amounting to more than 16 times VIG’s income (about $40 million in total) in an attempt to obscure VIG’s true profits and essentially launder the company’s money.

Not surprisingly, Wang and Ko saw an easy target in the EB-5 program and created the Velocity Regional Center (“VRC”) to solicit EB-5 investments to perpetuate their Ponzi scheme. VRC raised $4 million from EB-5 investors by deceiving visa-seekers into believing Wang had first lien on the real estate projects he was advertising.

Apparently, however, Wang misappropriated the EB-5 investors’ funds and directed their money to other non-related expenses. When VRC went bankrupt, the properties he was using in the EB-5 scheme were foreclosed.

As a result, the EB-5 investors received no visas for their money and promptly sued to recover their funds. In July 2018, a federal court judge found Wang liable for securities fraud and ordered him to pay back the $4 million he took from them.