Allegedly Derek Chu diverted millions of dollars which he spent on luxury cars, expensive jewelry, and travel, prosecutors say,
A California man is accused of running a $39 million Ponzi scheme, and spending at least $7 million of investors' stolen money to fund his own “lavish lifestyle.”
Derek Chu raised $29 million promising the funds would be used to buy and resell luxury suites at Oracle Arena, California.In 2018, Chu promised one alleged fraud victim that he could offer them $5,000 of interest on their investment of $250,000 for Golden State Warriors basketball tickets, the complaint shows. Instead, he passed the funds on to a family member, a close family friend, paid off credit card debt and utility bills and reimburse other investors, according to the complaint.
Felix Chu, the investors claim, lived an “ostentatious” life using their money, and bought a luxury car. They also claim that Felix diverted their funds into Derek’s ticket resale business, according to court documents.Chu, along with his father, Felix Chu, was sued in San Francisco civil court by Jonathan and Carol Mayeda, a couple
In 2012, Felix and Derek asked Satoshi Mayeda, Jonathan’s father, to lend Derek money to open his own business, and promised to pay back profits in the form of interest on the loan. Satoshi agreed, and signed a promissory note, according to the court documents. Satoshi went on to loan Derek more money, even after his business collapsed in 2013, the complaint alleges. Jonathan Mayeda, too, loaned Derek money.
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