Former Ameriprise Financial Services, Inc. Broker Li-Lin Hsu Sentenced to 11 Years in Prison for Ponzi Scheme
Posted on Tuesday, June 2nd, 2020 at 3:37 pm
Erez Law is currently investigating former Ameriprise Financial Services, Inc. broker Li-Lin Hsu (Yilin Hsu) (CRD# 4706509) regarding her Ponzi Scheme that defrauded at least 20 clients out of $8.1 million. Hsu has been registered with Ameriprise Financial Services, Inc. in Los Angeles, California from 2006 to 2015.
In January 2020, Hsu was sentenced to 136 months in federal prison and ordered to pay $5,274,277 in restitution to her victims of her Ponzi Scheme. According to the press release by U.S. Attorney’s Office of the Central District of California, Hsu ran a Ponzi scheme that defrauded 20 of her clients – including some of her relatives – out of more than $8.1 million.
“Between February 2014 and May 2018, Hsu lured in her victims with the promise that she would safely invest their money. She gained the trust of her victims – nearly all of whom are members of Southern California’s Chinese community – by speaking to them in their native language and telling them she was part of their community. Other victims included Hsu’s relatives,” according to the press release. “In reality, Hsu failed to invest any of her victims’ money. Instead, she used their funds to buy homes in Diamond Bar and Irvine, a luxury Tesla automobile, a vacation at the Peninsula Hotel in Paris, and thousands of dollars’ worth of luxury goods at high-end stores such as Harry Winston, Chanel and Hermes. In the hallmark of a Ponzi scheme, Hsu also used money she stole from later investors to make lulling payments to early investors.”
The documents reported that after Hsu was terminated from Ameriprise Financial Services, Inc., Hsu founded her own company American Capital Trading Group LLC. Then in 2016, she founded American Capital Republic, Inc., where she sought out additional victim investors and swindled them. The investigation found that Hsu told new clients at her two companies that funds they invested would be used in low-risk municipal bonds. As part of her scheme, Hsu “fabricated account statements that showed her victims’ funds were safely invested and lulled her victims into believing the account statements by making nominal ‘interest payments’ that originated from the funds of other victims. She also lied to one of her victims when she said American Capital Trading Group – which she controlled – was an Ameriprise affiliate.”
The investigation also found that Hsu lied under oath to the Securities and Exchange Commission (SEC). “After the FBI arrested Hsu in April 2018 and in violation of a court order, Hsu met with two of her victims and told them to lie to the FBI that her plan had always been to invest in the two properties she had purchased. She also induced them to give her an additional $450,000, which she then used to pay back another victim,” according to the release.
In February 2019, Hsu pled guilty to one count of wire fraud.
In February 2018, HSU was indefinitely suspended by FINRA following allegations that he, “failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.”
In June 2016, Hsu was barred by FINRA after he failed to respond to FINRA’s request for information.
In August 2015, FINRA suspended Hsu for 3 months after he failed to respond to FINRA’s request for information.
Hsu has been the subject of three customer complaints between 2015 and 2017, one of which was closed without action, according to her CRD report:
January 2017. “Claimants allege that in August 2014, respondent Hsu advised them to purchase a failing an unprofitable business for her personal gain and that Hsu illegally borrowed money from them.” The customer sought $1 million in damages and the case was settled for $100,000.
September 2015. “Claimant alleges that, in 2015, her advisor, formerly associated with respondent, misappropriated investment funds intended for her account. Claimant requests $805,370 plus interest, opportunity costs, and unspecified punitive damages.” The customer sought $805,370 in damages and the case was settled for $675,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Ameriprise Financial Services, Inc. may be liable for investment or other losses suffered by Hsu’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.