Federal Prosecutors Have Indicted a Man Over an Alleged $39 Million Ponzi Scheme Involving NBA Tickets
While the Golden State Warriors have made their historic run the last decade, a ticket scandal may have been casting about in their shadow.
A man in the San Francisco Bay area was indicted last week for allegedly conducting a massive Ponzi scheme that involved over 100 people. Derek Vincent Chu, 41, received $39 million in investments into a supposed business involving the purchase and resale of NBA tickets and luxury suites at the Oracle Arena in Oakland, the Crypto.com Arena (formerly known as the Staples Center), and the Chase Center in San Francisco, according to federal prosecutors.
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Chu received investments by making “numerous materially false misrepresentations, including how the investor funds would be used, how investors would be repaid, and whether the investments were secured by collateral,” federal prosecutors said. He also mixed investors’ money between his personal and business accounts. Then, he used earlier investor money to repay previous investors.
Federal prosecutors also alleged that Chu used more than $7.3 million of investor funding to pay credit card debts, withdraw cash, and even purchase luxury automobiles and jewelry. Chu’s attorney information wasn’t immediately available. He did not issue a plea during a preliminary court appearance last week, according to the San Francisco Chronicle.
A man told a local Bay Area ABC affiliate that Chu was “well-connected” in San Francisco’s Chinatown community. The man, who only went by the nickname Kingsley, said his 76-year-old mother signed her San Francisco home over to Chu.
“It starts off as several thousand. Then it goes up to a hundred thousand,” he said. “She realized it was all a lie and she felt truly, truly ashamed by it. It broke my heart because it looked like her soul wasn’t there at the time.”
The investigation into Chu involved the Internal Revenue Service, the Federal Bureau of Investigation, and the San Francisco Police Department. Chu was charged with eight counts of wire fraud and three counts of money laundering. If found guilty, he faces decades in prison. Chu’s next court appearance is Wednesday, May 10.
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