Feds: Company Touting 5% Weekly Returns Was Multi-Million Dollar Ponzi Scheme
A convicted forger was hit with civil fraud charges by the Securities and Exchange Commission on allegations that his multi-level marketing program and commodities trading outfit was nothing more than a $3 million Ponzi scheme. Vu H. Lee and his company, TeamVinh.com, were accused of violating federal securities laws by soliciting nearly 6,000 investors with the promise of guaranteed 5% weekly returns. The Commission is seeking disgorgement of ill-gotten gains, prejudgment interest, injunctive relief, and imposition of civil monetary penalties.
According to the complaint, Le formed TeamVinh.com LLC in 2009. Le appealed to the multi-level marketing community in claiming to have devised a solution to facilitate the creation of a "downline" for individuals through the creation of a "matrix" composed of other individuals signed up for TeamVinh.com. Participants were also offered the chance to invest in TeamVinh through either a membership or equity investment, with returns based on TeamVinh's profits. Le also later solicited investors for a "hidden" platform used by large companies to effectuate commodities transactions. In total, Le raised more than $3 million from at least 5,600 investors.
Many investors were solicited through various publicly available websites maintained by Vinh, including TeamVinh.com which is still operational as of the date of this article. The website contained various promises, including that:
My experience as a Business Advisor shows that the greatest opportunities emerge when economic times are at its worst.
TeamVinh has a light at the end of the tunnel. We can provide you with a powerful business solution to help you and your family be much more secured for the future.
Your Dreams will be supported by a Fortune 500-Caliber-Company and Civic Concept.
Earn Money. Earn a lot of Money. And then give a lot of it away.
Ironically, it was the final sentence of this last promise that authorities allege Le actually did keep, albeit likely not the way most investors would have expected. The Commission alleges that Le used very little of the $3 million raised from investors on MLM-related activities. Instead, Le is alleged to have gambled away more than $2 million of investor funds at a single Las Vegas casino. In classic Ponzi scheme fashion, Le is also accused of using investor funds to make Ponzi-style payments to existing investors.
Le is also accused of failing to disclose to potential investors that he had been previously convicted on charges of forgery and passing bad checks by the state of Wisconsin in 1995 and later served a two-year prison sentence. Additionally, the states of Wisconsin and Minnesota barred Le from offering or selling securities in 2007 stemming from Le's apparent involvement in an unrelated real estate fraud.
A copy of the Commission's complaint is below: