Additionally, he sold overvalued and fake loans to a collateralized loan obligation trusty and new private funds established and advised by IIG. Then he used proceeds from those fraudulent sales to pay off earlier investors in a Ponzi-like manner.
Mr. Hu pleaded guilty to one count of conspiracy to commit investment adviser fraud, securities fraud, and wire fraud, which carries a maximum sentence of five years in prison.
He also pleaded guilty one count of securities fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
In July 2020, the SEC filed related fraud charges against IIG and Mr. Hu. The Commission revoked IIG’s registration for committing securities fraud.
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