SEC Charges Virginia Resident with Operating a Ponzi Scheme that Targeted Chinese-American Community

The Securities and Exchange Commission (SEC) has taken legal action against Bin Hao, a resident of Virginia, and his company, Qidian LLC, alleging their involvement in fraudulent activities that raised approximately $10.3 million from over 60 investors across at least 17 states. The SEC’s complaint revolves around the unregistered securities offering, primarily targeting members of the Chinese-American community, with a significant focus on individuals in Virginia and Maryland.

According to the SEC’s complaint, the alleged fraudulent activities spanned from at least 2017 to 2020. During this period, Hao, operating through Qidian, offered and sold promissory notes and membership interests to investors, promising high annual return rates ranging from 8% to 25%. These investments were intended to facilitate loans to a real estate company based in Miami. The complaint further alleges that starting in January 2019, the Miami real estate company ceased making most interest payments to Qidian. Despite this, Qidian and Hao reportedly continued to solicit investors, raising approximately $10.3 million by pledging the same high annual rates of return and promising to allocate the funds towards real estate loans. Notably, they failed to disclose the deteriorating financial condition of the Miami real estate company. Additionally, as per the complaint, Qidian and Hao engaged in a Ponzi-like operation by using new investor funds to pay returns to earlier investors. Furthermore, Hao is accused of misappropriating at least $793,267 for personal expenses.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, charges Hao and Qidian LLC with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5 thereunder. The SEC’s legal action seeks permanent injunctive relief, disgorgement of allegedly ill-gotten gains, including prejudgment interest, civil penalties against both defendants, and an officer-and-director bar specifically targeting Hao.

If you suspect your advisor mismanaged your money or committed negligence or fraud, call Sonn Law Group for a free consultation at 833-912-3000 today.