(KRON) — An Alamo man was indicted for allegedly running a $39 million Ponzi scheme involving over 100 victims, officials announced. The suspect, Derek Vincent Chu, 41, was indicted by a federal grand jury on April 28. and charged with eight counts of wire fraud and three counts of money laundering, officials said.
Officials said between 2013 and 2020, Chu raised $39 million using several companies by soliciting investments for the purchase and resale of basketball tickets and luxury suites at Oracle Arena in Oakland, the Staples Center in Los Angeles and the Chase Center in San Francisco. Chu allegedly gave investors false information on how investor funds would be used, how investors would be repaid and whether investments were backed by collateral.
Officials allege that Chu mixed investor funds with his personal and business accounts and used it to pay investors back. The indictment also alleged that Chu used about $7.3 million in investor funds for personal expenses including paying credit card debts, making cash withdrawals, paying for travel, luxury automobile and jewelry purchases and paying utilities bills.
Chu was arrested Tuesday morning. He faces up to 20 years in prison for each count of wire fraud and 10 years in prison for each count of money laundering. He is due in court May 10.