A federal jury convicted a California woman of operating a massive Ponzi scheme that defrauded hundreds of investors out of nearly $10 million. Bich Quyen Nguyen, 59, was convicted of a single count of conspiring to commit wire fraud, which carries a maximum twenty-year prison sentence. Following the jury's verdict, Nguyen was ordered into custody until her sentencing, which is scheduled for March 13, 2014.
Nguyen told potential investors that she was the chief executive officer of a Swedish credit union that offered guaranteed returns as high as 46.2% through 1-year certificates of deposit. These outsized returns were possible, according to Nguyen, from purported high-frequency and high-velocity trading. In addition to Nguyen's promise that returns were guaranteed, investors were assured that Nguyen had "prepared" for the financial crisis and that their funds were safe in "blocked" accounts. To meet Nguyen's minimum investment requirement of $1 million, victims were urged to form investment clubs in order to pool their funds together. In total, Nguyen raised millions of dollars from investors.
However, following an investigation by the Securities and Exchange Commission that found that investor funds were commingled and not used as promised, a federal judge issued an injunction preventing Nguyen and her associates from soliciting investors. Further investigation showed that Nguyen was running a classic Ponzi scheme, using incoming investor funds to make Ponzi-style payments to existing investors.
Another of Nguyen's associates, Johnny Edward Johnson, 70, subsequently pleaded guilty to conspiracy to commit wire fraud and is scheduled to be sentenced on March 28, 2014.