Five Accused of $30 Million ‘Education’ Ponzi

LOS ANGELES (CN) - A criminal ring defrauded Chinese Americans of tens of millions of dollars through YouTube and other postings pushing "children's educational courses," federal prosecutors said in a 14-count indictment.

The scam involved Hong Kong-based CKB companies, prosecutors said, standing for Cyber Kids Best Education, and other names.

Though they claimed it was a profitable company about to go public through an IPO, it was a pyramid scheme whose money came from suckers' investments of $1,380 at a time, each one supposedly tradable for $750 in cash, which they could add up by roping in new suckers, the U.S. Attorney's Office said.

The five named defendants collected $30 million since they started the racket in 2011, kept $6.5 million for themselves and "transferred the rest to others involved in the scheme," according to the U.S. attorney.

Indicted on one count each of conspiracy and 13 counts each of wire fraud are Cheong Wha "Heywood" Chang, 47, of Taiwan, formerly of Hacienda Heights ; his wife, Toni Chen, 46; Wen Chen "Wendy" Lee, 53, of Roland Heights; Daliang "David" Guo, 53, of Hyde Park, N.Y; and Chih Hsuan "Kiki" Lin, 50, of Los Angeles and Las Vegas.

Lin is being held without bond. The others were released of bonds of $250,000 to $500,000.

The SEC sued them on similar charges in October 2013.

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