Friday, March 18, 2016

Arcadia GemCoins Update: New Fed Report Shows USFIA Was "Undoubtedly A Ponzi Scam"

Former Arcadia Mayor Johnny "GemCoins" Wuo
It has been awhile since we have been able to give you an update on the Federal investigation into the Arcadia GemCoins scandal. Thanks to the blog BehindMLM we now have some interesting new details to discuss. Here is their conclusion in a new article titled "Receiver: No indication USFIA’s GemCoin was legitimate" (link):

At this point, there is no indication there was any legitimate Gemcoin or other viable business operated by (USFIA).

Aside from some income generated by the hotel and rental properties, (USFIA) had no significant source of income other than money raised from investors. The Receiver has verified that virtually none of the assets described in online and written marketing materials actually exist.

Instead of mines located around the world, millions of dollars in precious gems, and houses and cars available to be awarded to investors, the Receiver has found only costume jewelry, boxes of rocks, and bins filled with tens of thousands of little rings of nominal value.

Some questions that remain for us here at The Tattler are how did a ponzi scheme of this magnitude, and with the quite public participation of longtime Councilmember and former Mayor John Wuo, remain undetected for so long by the richly compensated law enforcement apparatus of the City of Arcadia? Did Arcadia function as a safe haven for an international crime syndicate whose sole source of income was defrauding vulnerable Chinese immigrant investors of their life savings?

This one as well. Did the city turn a blind eye to all of this because of USFIA head Steve Chen's close financial and personal ties to former three term Mayor and sitting Arcadia City Councilmember John Wuo?

Hopefully we will get answers to these inquiries soon. You would think that corruption of this magnitude would at least be getting some kind of official City Hall review. Though I do not get the impression that Chief of Police Robert "Don't Call Me Woody" Guthrie or City Manager Dominic Lazaretto are burning any midnight oil trying to get to the bottom of any of these matters.


USFIA Head Steve Chen's Ex-Missus Fights To Maintain Opulent Lifestyle
One of the mordantly comical passages found in the BehindMLM report deals with Steve Chen's former missus Jennifer Zhao aka Li Zhao and her attempts to maintain an opulent lifestyle despite Fed demands that she leave her McMansion and fork over her remaining stolen assets.

Steve Chen’s ex-wife stripped of glamorous lifestyle
Jennifer Zhao aka Li Zhao, the mother of Steve Chen’s son, has been all but stripped of the USFIA gravy train she purportedly lived off. Zhao’s USFIA slush fund was just over $3 million, which the Receiver seized in a Bank of America account under the name “Ally Investors”.

Ally Investors was basically a shell company set up for Chen to launder funds to his ex-wife through. This saw Zhao live the high-life at the expense of USFIA investors, with laundered funds spent on a luxury home, Porsche lease payments, credit card bills, shopping sprees, and casino trips.

Zhao was furious upon learning the Receiver had frozen her slush fund account, and filed a motion demanding the Receiver return the seized funds. The motion was denied but Zhao was granted access to a frozen custodial account (the Receiver’s report doesn’t state how much was in it).

As the second-highest paid employee of USFIA, Zhao’s personal relationship with Steve Chen is likely instrumental to further dissecting the scheme’s Ponzi operations.

To that end the Receiver filed a subpoena demanding she turn over documents of interest. Zhao objected, with the court overruling the objection last month.

The Court gave Zhao until February 25, 2016, to produce the subpoenaed documents. On February 25, 2016, Zhao produced documents, which the Receiver and his counsel are in the process of reviewing.

For the moment Zhao resides in a $2.3 million dollar house purchased with stolen USFIA Ponzi funds. The Receiver has demanded that Zhao turn over the Gainsborough Property.

For the time being, Zhao and the Receiver have agreed to try and reach a global resolution of issues and have agreed to defer such discussions until the Receiver has performed additional accounting work and completed discovery.

If a resolution of the Gainsborough Property issue is not reached during those discussions, the Receiver will take necessary and appropriate steps to recover the Gainsborough Property. My guess is “global resolution of issues” is Zhao buying more time, with the property likely to be sold off later in the year.

Great stuff. Much of the information used in this BehindMLM expose' comes from a report prepared for the United States District Court that is presiding over the legal dissolution of the Arcadia USFIA GemCoins ponzi empire. You can link to that here.

Here is a list of all the USFIA'GemCoins assets that have been seized by the government.


Pretty impressive haul. Hopefully all of that money will be returned to the investors defrauded by the USFIA/GemCoins ponzi scheme soon.

We also continue to sincerely hope that news of the whereabouts and current legal condition of former Arcadia Mayor John Wuo will be surfacing soon as well.

One more thing. To date there has been no indication of who Johnny GemCoins Wuo will be endorsing in the upcoming Arcadia City Council election. Though we do suspect that he must be a Bulldozer Bob Harbicht man.

sierramadretattler.blogspot.com

49 comments:

  1. GemCoins not backed by Amber mine?

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    1. Amber has been discovered in large quantities beneath the Sierra Madre water dept spreading grounds. It is being sold and the proceeds will save the city. City Hall is also issuing a crypto-currency backed by this amber find called Capoccia Coins.

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    2. 7:02 AM Thank you !
      I laughed so hard I almost spit out my coffee this morning .
      CAPPOCCIA COINS !
      Too funny.

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    3. I think they're wooden.

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    4. 5:27AM You're back! I still laugh. And 7:02AM, I am still laughing. Capoccia will hunt you down with a vengeance now. He hates being made fun of.

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    5. I took some Capoccia Coins down to the Drop-A-Load but none of the machines would take them.

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  2. I think the Feds should look into that guy Sho Tay or whatever his name is. He's up to something in Arcadia.

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    1. Sho is more of a development puppet than crime boss. Besides, he spends too much time posting pictures of himself on WeChat. Seems to take up most of his day.

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    2. Sho Tay is not necessarily just a puppet. He has cleaned up most of his internet traces. Back when he first started to run for city council years ago, most people did not want to vote for him just by reading what he did for businesses (various kinds). Some are in real estate. Here's one that might actually be legal:
      http://listings.findthecompany.com/l/9964368/Sho-Sherry-Tay-Inc-in-Arcadia-CA

      "An estimated $150,000 in annual revenue" -- you probably won't see such kind of income report on the form he filed with the city before he ran for office in 2014.

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    3. He has a nice smile.

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    4. So do crocodiles .

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  3. Someone still maintains a website trying to get back to normal GemCoin business and trying to gather petition signatures for Steve Chen (scroll down to see the petition link button or click on "About US" or "Contact US"):
    http://www.usfia-investment.com/

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    1. Chen needs to be deported. He is still wanted for various crimes in China. Now that he has been stripped of all his cash government officials in the Peoples Republic will have little time for his nonsense. Let them deal with him.

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  4. Is Chen still running around scot-free? Why isn't he behind bars on felony charges? Same goes for Johnny boy.

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    1. If this was China they would have been shot by now.

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  5. Just another sad ending for a professional politician or 'Judi Goat' that lead naïve people down a prim rose path only to be fleeced this can be said for professional politician's and their need for voters to follow them while they fleece a cities bank accounts. In communist china when or if a white color crook is caught they pay the ultimate price their life, wonder if that would work here in the USA? Why not give it a chance instead of sending them to Federal Resorts.

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  6. That Arcadia's government agency has never even addressed the corruption of John Wuo with the public is quite telling. They have a remarkably high tolerance for that sort of thing. You can only wonder what else they have chosen not to notice.

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  7. if this was china most of the posters on this site would be shot

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    Replies
    1. Freedom properly practiced is the nightmare of most governments.

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    2. If this was China our internet would probably be blocked.

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  8. The Gainsborough property that the Feds are after is located in San Marino just above the High School. Apparently owned by Jennifer Zhao in mid-2015 for $2,335,000. Its transactions in Blockshopper are all N/A as are the actual identities of many serial Chinese buyers. The whole property inflation in San Marino is a result of these serial purchase games, and the property taxes are enormous. Over $15K per year on this lot.

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    1. Interesting to know. Had the scam lasted any longer, they would have bought many more properties in expensive neighborhoods all over Southern California.

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    2. There is probably a direct tie between the GemCoins gang and Arcadia mansionization. Why else would Wuo have gotten involved?

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    3. The tie is rather obvious. Chinese citizens are not allowed to export more than 50,000 USD per person. So, legally, they can never purchase a multi-million dollar home, most of them cash transactions, in the US, unless they have help to launder the money out of China. One way to do this would be to hire people to transfer the maximum money per person out of China. Alternatively, a cryptocurrency seems an ideal vehicle to do enable these transactions.

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    4. "Alternatively, a cryptocurrency seems an ideal vehicle to do enable these transactions."

      Would you like to buy some?

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    5. Always follow the money...

      As a Chinese businessman who wants to have a safe haven in the US, you need to find a way to bring your money out of the country. Paying USFIA in China 5 million dollar and receiving from USFIA in Arcadia 4.5 million dollar to purchase a home in this nice city was an attractive option to avoid any restrictions on how much money one could export. The assumed 10% loss may be an acceptable price to pay in a country where bribery is commonplace.
      Using gemcoins also avoids any direct control of how much money is actually laundered this way. Every US bank needs to make reports on transactions over 10,000 USD. A cryptocurrency does not have such control mechanisms. If an ordinary citizen purchases a house and gets a 10,000 USD gift from their parents, banks are sure to ask where this money is coming from. Not so in all cash transactions. There is no bank, thus no control. The Chinese business man is happy and recommends this service to his influential friends. Because he invested more than 500,000 USD in the US, he even gets an EB5 visa, his direct pass to American citizenship, all organized by Gemcoin.
      As long as enough innocent people were purchasing this cryptocurrency so that the business leaders can be paid out in Arcadia, this Ponzi scheme could go on.

      The FBI and IRS would need to interview these business people in how they got their money out of China. The most logic explanation is that they used the cryptocurrency.

      Now, that Wuo has reportedly moved to China, which does not have extradition treaties with the US, one could postulate that he will attempt to tap into the deposits that have been diverted from USFIA in China.

      Has anyone else noticed that all of a sudden some of the mansions do not find a buyer after Wuo stepped down and reportedly moved to China? There are more mansions than buyers because the supply of money has dried up. In other words, the flow of the money has ceased and thus it is no longer so easy for these businessmen to get their money out of China... Coincidence? I don't think so. Economic slowdown? I don't think so. Like in the US, the slowdown of the economy does not affect the top 1% of the Chinese business leaders in any appreciable manner, but the unavailability of illegal money laundering practices does.

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    6. Which cryptocurrency? If you are claiming it was GemCoins, then you need to answer the following question. Why did so many Chinese businessmen and GC investors go screaming to the FBI? Because their GemCoins were useless, and the amber mine claims of Chen and Wuo a bad joke.

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    7. I think we are talking about two different clients here. There is a demand and supply side.

      The Chinese billionaires who bought their McMansions in Arcadia were not screaming. They got what they wanted: US home and US citizenship. Many of them still live in China but wanted a safe haven in the US. That's why so many of the sold McMansions are empty. They provided the demand for the houses and they did have the money but could not legally get it out of China, where the majority of it probably remains.

      It was the little investors (who might also be businessmen, likely the honest type, but clearly of lesser means than the billionaires who benefited from the Ponzi scheme) who got scammed. Those provided the supply of the money in the US and those are the ones who screamed to the FBI.
      But the money trail goes beyond those who got scammed.

      How could GemCoin help the billionaires getting their EB5 visas? Certainly not with a cryptocurrency. Real money was needed. Since it cannot be legally exported from China, it needed to come from legal and honest Chinese immigrants in the US. And this closes the money trail. The cryptocurrency (or call it underground money) enabled the money laundering from China to the US.

      Why would GemCoin help any Chinese Investor to get an EB5 visa and a house out of the goodness of their hearts?

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    8. The explanation about the tie between the GemCoin gang and Arcadia mansionization is very interesting. No wonder John Wuo wanted to take a team of Arcadia officials to China a year ago to promote Arcadia. I thought the decrease of buyers of Mcmansions was because the Chinese government tightened its control of capital flow out of China recently.

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    9. Exactly, the purpose of the proposed and canceled trip to China was to feed the demand for McMansions in Arcadia.
      -----
      There might even be a connection to the birth centers that pop up everywhere in Arcadia, including the Santa Anita Inn, in which City Council Sho Tay is holidng his private translation event.

      Who organizes these trips for pregnant woman? It is unlikely that they all end up in the same location by coincidence. There must be an organization behind it. Who owns that organization? Are they paying their taxes for this business?

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  9. Does anyone know what happened to Steve Chen and John Wuo's buddy Solomon Yang? He seems to have a house in the gated hilltop area above Foothills Middle School in Arcadia:

    "Eiji Sakurada, also known as Solomon Yang, is the owner of multiple companies based in China, Japan, and the United States. He is currently Chairman of Golden Apple Group International Inc., a firm specializing in real estate development in China. He purchased this 10,000 sq. foot home for $4 million in 2001." http://virtualglobetrotting.com/map/solomon-yangs-house/view/google/
    (Zoom out the map of his mansion and you'll see the Highland Oaks Dr. down there.)

    Wonder how many of his companies are different from the GemCoin one. Here's some more info about him and his business: http://www.zoominfo.com/p/Solomon-Yang/1515597424

    The Golden Apple Group is gone. You can access its cached webpage from the above link. The cached page showed its address as "75 N. Santa Anita Ave.,Suite 106, Arcadia". Who owns this place now?

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    1. It seems that Eiji Sakurada (Solomon Yang) also owns 1129 Highland Oaks Drive, Arcadia, CA 91006:
      http://losangeles.blockshopper.com/property/5771020021/1129_highland_oaks/

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    2. Most of the claims about Solomon Yang on that link are not true. He is from an ordinary family, not a relative of a famous founder of PRC. He had no academic relationship with the Chinese university. Also, the photos showing him with Chinese President or other world famous people are cut-and-paste Photoshop results.

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  10. "Time for a few more questions, and a little more investigation into the dealings over the years of Arcadia City Councilman Sho Tay (AKA Sholin Tay).

    Our first peek into the background of Sholin Tay’s web ventures brings us back to 1999, when he set up the web site WWCA. ... WWCA stating 'We have money and people like to invest! If you know or have good idea, let’s work together.' ... "

    http://www.losbanoslive.com/paper/?p=7563

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    1. We know Sho Tay owns the Chinese news paper at chinesedailyusa.com or uscnd.com. He also owns all the domain names below (type any of these sites and you'll come to the same "for sale" page)

      "01411.com ==> $15,000USD
      wwca.com ==> $50,000USD
      ChineseDailyNews.com ==>$120,000 Chinese Daily News
      ysf.com ==> $150,000USD
      cwu.com ==>$150,000USD
      dwp.net ==>$150,000USD

      Email: soultay@gmail.com
      "

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    2. Just got a creepy illegal robo call from some guy that sounded like he was 93 years old. Failed to identify himself or who paid for the call in violation of FPPC regulations.

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    3. what did he say?

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    4. Probably Bulldozer Bob robocall.

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    5. It only makes sense that the voice of reason would do robocalls.

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    6. Bulldozers realtor friends are really cluttering our fine city with his signs. Does anyone know the law about where signs can be placed? He's got 5 or so at NE corner of Duarte Rd and Second Ave, on the green tarp covering chain link fence on an undeveloped lot. Can't possibly be legal, unless they have permission from owner of the lot. I guess bottom line is if your vote is swayed by seeing some candidates sign, then we're pretty doomed.

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  11. How about a retrospective on just how outraged the Arcadia City Council and City Manager have been over the past 10 months that a ponzi scheme was operating within the peacock coop? What outrage you say? Well ...

    Sho Tay pulled ads praising Gemcoin from his websites
    Sho Tay referred victims of the fraud to a private citizen, Mr. Arvizu, not the Arcadia PD
    Sho Tay, Lazaretto, Chandler, Beck and Kovacic had exactly 0 hearings on the matter.
    Sho Tay, Lazaretto, Chandler, Beck and Kovacic took exactly 0 actions on the matter.
    Sho Tay, Lazaretto, Chandler, Beck and Kovacic expressed exactly 0 emotions or sympathy for the victims who spoke before them at council meetings.
    Sho Tay, Lazaretto, Chandler, Beck and Kovacic have expressed exactly 0 concerns about Steve Chen, Solomon Yang and their multi-year relationships with councilman John Wuo spanning several businesses ... Golden Apple, 24 HD ...

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    1. Maybe Steve Chen told them he'd tell everything he knows if they said anything.

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    2. Corruption abounds.

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  12. You called it Mr. Tat.
    Thanks so much.

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  13. I pray Li Zhao will be allowed to keep her Porsche. It would be barbaric if she is forced to take the bus.

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  14. Porsche and someone named Li Zhao driving it is a scary thought ... I'm betting she's that person that cut me off and couldn't get the car out of first gear .
    Never mind,she probably has an automatic which is so Porsche make me look good but totally incapable of ever driving the real deal .
    Porsche's for dummies .

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  15. If Ms Zhao is looking to unload her Porsche, perhaps a call to Elaine might be in order. Apparently the Benz is too tame for her these days.

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