Li Lin Hsu, a former Ameriprise financial advisor who ran an $8.2 million Ponzi scheme that defrauded 20 of her clients, including some of her relatives, has been sentenced to 136 months in federal prison. Hsu pleaded guilty in February 2019 to one count of wire fraud.
Hsu, a.k.a. Yilin Hsu Lee of Diamond Bar, California, was sentenced by United States District Judge Andrew Guilford and was ordered to pay nearly $5.3 million in restitution.
Hsu purportedly told her clients that their funds would be invested in low-risk municipal bonds, but instead, it was used to buy homes in Diamond Bar and Irvine, a 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.
In the hallmark of a Ponzi scheme, she also used money from later investors to make payments to early investors and fabricated account statements that included “interest payments.”
Hsu began her scheme while at Ameriprise but was fired in 2015 after the firm discovered her misconduct, and she was barred by the Financial Industry Regulatory Authority the following year.
Shortly after her termination from Ameriprise, Hsu founded her own companies – American Capital Trading Group LLC and American Capital Republic Inc. where she sought out additional investors. The feds said that she falsely told her victims, the majority of the which were members of Southern California’s Chinese community, that American Capital Trading Group was an Ameriprise affiliate.
Government officials said that Hsu repeatedly lied under oath to the Securities and Exchange Commission, which started their investigation into the scheme in 2016. The FBI arrested Hsu in April 2018.
Hsu has reportedly paid back some of the stolen money through the liquidation of her assets, her attorney, Kate Corrigan told the San Gabriel Valley Tribune.
“She’s made a commitment to herself and to the victims in the case to right the wrongs she has committed,” Corrigan said. “She has recognized and taken accountability for her actions and she has great regret of what she’s done to the victims in this case.”