ARCADIA, Calif. (FOX 11) - Angry investors are accusing an Arcadia company of bilking them out millions of dollars in what they are calling an international Ponzi scheme, and they’re asking the police department to file charges against the CEO, Steven Chen.
Thursday night, a group of the investors went to Arcadia police headquarters to demand charges be filed, saying the Alliance Financial Group owes them money after they invested in its digital currency called Gemcoin. They say they were promised hefty returns and have received nothing for their money. According to the company’s website and promotional material, Gemcoin is a bitcoin-like investment strategy backed by amber and other gemstones and “headed for extraordinary growth”. Also according to the promotional material provided to us by the investors, they were promised more “digital currency” on top of their original investment, if they brought in new investors.
Long Z. Liu, the attorney for the group alleges that Gemcoin is “an elaborate Ponzi scheme” with more than 80,000 victims in the U.S. and China, one that has cost investors an astonishing $160 million. According to the attorney, people put in their life savings and thought they would retire on their investments. “Obviously, that’s not going to happen now”, said Liu. The investors told police that on at least one occasion, when they demanded their money back from Chen, they were threatened with violence. They say the FBI is also looking into their allegations for financial fraud.
Some of the local investors say that they would never have put their money into Gemcoin if it wasn’t for the intervention of an Arcadia city councilman, John Wuo. They claim Wuo stood beside Chen at investment recruitment meetings and they believed he was endorsing Gemcoin in an official capacity. The investors provided YouTube videos showing Wuo calling the currency “breakthrough and cutting edge”, along with photos showing him at various Gemcoin events over the past year. Both in published reports and at recent Arcadia City Council meetings, Wuo has denied any involvement with the currency. FOX 11 News called Wuo’s City Council office requesting an interview and he never returned the call. We also attempted to talk with Chen at the company’s headquarters in Arcadia,, but were told that he was “unavailable”. A representative for the company told us that Chen will be holding a news conference on September 17 at which many questions will be answered.