4TH UPDATE 3:44 P.M. ET U.S.A. Before the SEC announced its civil pyramid- and Ponzi-scheme case on Sept. 26 against eAdGear figures Charles Wang and Francis Yuen, the pair had been indicted on a criminal charge in U.S. District Court for the Northern District of California, the PP Blog has learned.
Docket records show the indictment was filed under seal Sept. 18. On Sept. 23, prosecutors in the office of U.S. Attorney Melinda Haag requested the seal be lifted. The SEC announced its civil case three days later.
The specific criminal charge is conspiracy to structure transactions to evade bank-reporting requirements. A grand jury alleged that the eAdGear duo directed two employees to open bank accounts in the employees’ names “for the purpose of using those accounts as nominee accounts in which to conduct structured cash transactions.”
The FBI is leading the criminal investigation, according to papers filed in the case.
News of an eAdGear criminal investigation first was reported yesterday by the Wall Street Journal under a headline of “SEC on Lookout for Web-Based Pyramid Schemes.” The PP Blog learned that an indictment had been returned by locating a criminal case number in a Nov. 12 order issued by U.S. District Judge Yvonne Gonzalez Rogers that also referenced the SEC’s civil case. The ASD Updates Blog then located the indictment, which lays out a structuring plot dating back to 2011 involving accounts at multiple banks.
Separately, the PP Blog learned that police in Taiwan carried out eAdGear-related raids in October. News of the raids first was reported in Taiwanese media, including reports in Chinese.
Accounts at JPMorgan Chase, Bank of America and Bank of the West allegedly were used in the Wang/Yuen structuring conspiracy, with Wang further accused of using accounts in his name and in the name of a relative to advance the plot.
Transaction sums were kept below $10,000 “such that they would not cause the relevant financial institutions to generate a currency transaction report,” according to the indictment.
“It was also a part of the conspiracy that, after these accounts were opened, [Wang], using funds for eAdGear memberships, made numerous structured cash deposits into these accounts and other accounts,” according to the indictment.
Yuen, according to the indictment, “caused to be transferred tens of thousands of dollars of the structured cash deposits into a separate consumer loan account at [Bank of the West],” according to the indictment.
Wang and Yuen both posted bond of $100,000, according to court records. Wang, 52, of Warren, N.J., may need a Mandarin interpreter, according to the docket of the case.
Yuen, 53, resides in Dublin, Calif., according to the SEC.
The Wall Street Journal article includes a statement from HYIP huckster T. LeMont Silver.