SEC Institutes Asset Freeze Against Group of California Companies in a Real Estate Investment Scheme

Posted on November 18th, 2013 at 3:27 PM

From the Desk of Jim Eccleston at Eccleston Law Offices:

On November 1, 2013, the Securities Exchange Commission (“SEC”) announced fraud charges and an emergency asset freeze against a group of companies based in Pasadena, CA which are the center of an ongoing real estate investment scheme.  In particular, the SEC alleges that Yin Nan (“Michael”) Wang and Wendy Ko have raised more than $150 million from approximately 2,000 investors by selling promissory notes issued through Velocity Investment Group (“Velocity”).  Velocity manages a series of investment funds entitled the Bio Profit Series, which purports to be primarily in the business of making real estate-related loans in California, but, in reality, it is alleged that the operation is a Ponzi scheme.

            Further, Wang allegedly falsified financial records and used another company to create the illusion of legitimate economic activity.  Moreover, according to the SEC, Wang and Velocity Investment Group have been raising money since at least 2005.  Wang is the sole owner of Velocity Investment Group, and the Bio Profits Series fund accounts are controlled by Wang and Ko, who transferred some investor funds to make quarterly interest payments to other investors. 

            The SEC also alleges that Wang directed one of the Bio Profit Series funds to provide its outside accountant with inaccurate financial information that materially overstated its mortgage loans receivable and mortgage income figures.  In addition, the SEC alleges that Wang and Ko used transactions between the Bio Profit Series funds and another company charged in the complaint (Rockwell Realty Management) with the apparent purpose of concealing the fraud.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags:

Return to Archive

TESTIMONIALS

Previous
Next

Thank you for your professional assistance with this matter. You are very good at what you do.

John T.

LATEST NEWS AND ARTICLES

January 23, 2025
Barred Advisor Continues Pattern of Settlements at Western International Securities

Chris Kennedy, a barred advisor formerly associated with Western International Securities, has agreed to a $2.1 million settlement with the Securities and Exchange Commission (SEC) over allegations of high-volume trading, or churning, in client accounts.

January 22, 2025
FINRA to Revise Outside Business Activities Rules

The Financial Industry Regulatory Authority (FINRA) is seeking to overhaul its rules on outside business activities (OBA) and private securities transactions.

January 21, 2025
FINRA Orders $8.2 Million in Customer Restitution Over Mutual Fund Fee Errors

FINRA has required Edward Jones, Osaic Wealth, and Cambridge Investment Research to reimburse customers a combined total of more than $8.2 million for improperly charged mutual fund sales fees.