Over 100 community members of San Francisco’s Chinatown were scammed out of $39 million in a Ponzi scheme that involved basketball tickets and luxury suites, according to federal prosecutors.
Derek Chu, 41, was arrested on May 2 in connection with the crime, which allegedly ran between 2013 and 2020. The Alamo resident is accused of conning the victims to invest in the scheme to buy and resell Warriors tickets and luxury suites at Oracle Center, Staples Center and Chase Center.
Chu allegedly commingled the victims’ money between his personal and his companies’ accounts, using some of them to repay earlier investors. Meanwhile, he pocketed more than $7.3 million to fund his own lavish lifestyle, as per charging documents.
Attorneys Jaynry Mak and John Chow, who are representing multiple victims, said the scheme began targeting a specific demographic of victims.
“We believe the first round is Chinese, monolingual seniors,” Mak told KGO. “Because many of these victims are seniors they went through emotional abuse from this. Some were suicidal.”
Among the victims is a 76-year-old woman who reportedly lost more than $3.5 million.
“Closer to 2016 is when all the money deals started happening, where it’d start out as, ‘Hey, if you give me some money I can give you some interest, right? 11%, 18%.’ Sounds really good,” the woman’s son, identified only as Kingsley, told KPIX.
Returns were consistent in the beginning and even hit millions following the sale of a property, Kingsley recalled. However, they slowed down and eventually came to a halt.
Chu is accused of using the victims’ money to pay for his own credit card bills, luxury cars, designer handbags, sneakers and jewelry. His father, Felix, a retired insurance agent in Chinatown — and a longtime friend of Kingsley’s mother — is also believed to have played a role in the scheme.
Chu has been charged with eight counts of wire fraud and three counts of money laundering.
He faces up to 20 years in prison for each wire fraud count and 10 years for each money laundering count, as well as up to $500,000 in fines.
Investigation into the case continues and others who may also have been victimized are urged to contact the U.S. Attorney’s Office for the Northern District of California’s victim specialists by email at [email protected]
Chu is scheduled to return to court on Wednesday.