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Financial Advisor Gets More Than 11 Years in Prison for Defrauding Over a Dozen Clients in $8.1 Million Ponzi Scheme

Posted by Fay Arfa | Jan 31, 2020 | 0 Comments

A federal district court judge sentenced Li Lin Hsu, a.k.a. Yilin Hsu Lee, 42, of Diamond Bar,  a former Ameriprise financial advisor who ran a Ponzi scheme that defrauded 20 of her clients – including some of her relatives – out of more than $8.1 million to 136 months in federal prison. The judge also ordered her to pay $5,274,277 back to her victims.  Hsu pleaded guilty in February 2019 to one count of wire fraud.

            Between February 2014 and May 2018, Hsu promised her investors that she would safely invest their money. She gained the trust of her victims – mostly  members of Southern California's Chinese community – by talking to them in their native language and telling them she was part of their community. Other victims included Hsu's relatives.  Hsu never invested any of her victims' money. Instead, she used their money to buy homes in Diamond Bar and Irvine, a luxury Tesla automobile, a vacation at the Peninsula Hotel in Paris, and thousands of dollars' worth of luxury goods at high-end stores such as Harry Winston, Chanel and Hermes. Hsu also used money she stole from later investors to make lulling payments to early investors.

Hsu began her scheme while employed at Ameriprise Financial, Inc., as a financial advisor. Ameriprise fired her in 2015 after discovering her misconduct. In 2016, the Financial Industry Regulatory Authority (FINRA) barred Hsu from working in the investment business. Shortly after Ameriprise terminated her, Hsu founded her own companies – American Capital Trading Group LLC and, in 2016, American Capital Republic, Inc. – where she sought out additional victim investors and swindled them.

            Hsu told these new clients that their funds would be invested in low-risk municipal bonds. As with her Ameriprise accounts, Hsu failed to invest the funds as promised, but instead spent the money on herself. She fabricated account statements that showed her victims' funds were safely invested and lulled her victims into believing the account statements by making nominal “interest payments” that originated from the funds of other victims. She also lied to one of her victims when she said American Capital Trading Group – which she controlled – was an Ameriprise affiliate. Through these two companies, Hsu caused losses of $8,191,554 to her victims. 

            In 2016, Hsu repeatedly lied under oath to the Securities and Exchange Commission, which had begun investigating her. After the FBI arrested Hsu in April 2018 and in violation of a court order, Hsu met with two of her victims and told them to lie to the FBI that her plan had always been to invest in the two properties she had purchased. She also induced them to give her an additional $450,000, which she then used to pay back another victim.

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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