A 40-year-old Wisconsin woman has been accused of operating a scheme that defrauded around 70 Hmong American investors out of at least $16.5 million.

A civil complaint was filed on Wednesday by the Securities and Exchange Commission, charging Kay Yang with four counts of securities fraud from between April 2017 and April 2021. 

Her husband, 47-year-old Chao Yang, has also been charged with “one count alleging the improper receipt of $800,000 in investor money.” According to the complaint, Yang lied to investors and the SEC, providing documentation that claimed that the funds were performing well.

“However, these account statements were fake; some had been altered to inflate the monthly profits or to show a much smaller monthly loss than her actual trading results,” the complaint said.

The SEC also found that some of the investors did not speak English as their first language and some were not “sophisticated investors.”

Investigators found that Yang had been targeting investors, mostly Hmong Americans, in eight states, including Minnesota and Wisconsin. The FBI suspects that Yang ran a Ponzi scheme, or an investment fraud that pays existing investors with money from newer investors.

Yang made $16.5 million using an unregistered offer and security sales through her two companies: AK Equity LLC and Xapphire Fund LLC. Yang is also the vice president of 5XEN Inc., the company that runs Milwaukee’s 5xen Super Asian Market.

A large portion of the money was used to fund Yang’s lavish lifestyle. She purportedly spent around $1.5 million on real estate in Wisconsin cities Mequon, Sheboygan and Suakville as well as Zimmerman, Minnesota. She also spent $790,000 on living expenses, $585,000 on travel, which included a $110,000 trip to Maui with 60 guests, and $313,000 on luxury cars, including two BMWs, a Lexus and a Tesla.

Federal authorities also discovered that Yang had spent $400,000 on repaying investors from a previous scheme.

The SEC has claimed that due to the collapse of Yang’s scheme, most of her investors were unable to have their money returned while some have lost their entire investment. They are now working to get Yang and her husband to pay fines and repay their investors with interest.