Federal officials say that more than 100 people in San Francisco’s Chinatown were scammed out of $39 million in a Ponzi scheme involving basketball tickets and luxury suites.
Derek Chu, who is 41 years old, was caught on May 2 for the crime, which is said to have happened between 2013 and 2020. The Alamo resident is accused of tricking the victims into investing in his plan to buy Warriors tickets and private suites at Oracle Center, Staples Center, and Chase Center and then sell them for a profit.
Chu is said to have mixed up the money of his victims in his personal and business accounts and used some of it to pay back earlier donors. During this time, he made more than $7.3 million, which he used to pay for his own lavish living, according to the charges.
Attorneys Jaynry Mak and John Chow, who are helping more than one victim, said that the scam started out by going after a certain type of victim.
“We think the first round is made up of Chinese seniors who only speak Chinese,” Mak told KGO. “Because a lot of these people are older, this hurt them emotionally. Some of them wanted to kill themselves.”
One of the people who lost money is a 76-year-old woman who lost more than $3.5 million.
“All the money deals started happening closer to 2016 when people would say things like, “Hey, if you give me some money, I can pay you interest, right? 11%, 18%.’ “That sounds really good,” Kingsley, the woman’s son, told KPIX.
Kingsley said that the returns were steady at first and even reached millions after the sale of a house. But they slowed down and stopped moving in the end.
Chu is accused of using the money from his victims to pay for his own luxury cars, branded handbags, sneakers, jewelry, and credit card bills. His father, Felix, is a retired insurance agent in Chinatown who has known Kingsley’s mother for a long time and is also thought to have been involved in the plan.
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Chu is accused of eight counts of wire fraud and three counts of moving money.
He could go to jail for up to 20 years for each count of wire fraud and 10 years for each count of money laundering. He could also be fined up to $500,000.
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