MEQUON, WI – Kay Yang and her companies, AK Equity Group LLC and Xapphire LLC, have been slapped with a default judgment and permanent injunction by the U.S. District Court for the Eastern District of Wisconsin for perpetrating a forex fraud targeting the local Hmong community, according to a Commodity Futures Trading Commission (CFTC) announcement. The judgment, entered June 5, mandates Yang, AK Equity, and Xapphire to pay a combined $24,080,326.18 – $13,692,690.27 in restitution to victims and $10,387,635.91 as a civil penalty.
The court also ordered Yang’s husband, Chao Yang, designated as a relief defendant, to disgorge $1,422,430.42, representing funds derived from the fraudulent scheme. All defendants are permanently barred from violating the Commodity Exchange Act (CEA), registering with the CFTC, and trading on CFTC-regulated markets.
The CFTC’s complaint, originally filed April 13, 2022, detailed how Yang, as founder and CEO of AK Equity and Xapphire, allegedly solicited at least $15.7 million from approximately 67 individuals, primarily within the Hmong community in Wisconsin, for a commodity pool purportedly trading foreign currency. Investigators found Yang and her companies engaged in fraud, acted as unregistered commodity pool operators, and violated registration requirements.
The investigation revealed that at least $4.8 million of the pooled funds were misappropriated by Yang for personal expenses, including a reported $1.4 million spent at casinos, luxury hotels, and on vehicles. The CFTC warns that victims may not fully recover their losses, as wrongdoers often lack sufficient assets to cover restitution.
The CFTC acknowledged assistance from the National Futures Association, the Securities and Exchange Commission, the Wisconsin Department of Financial Institutions, and international regulatory bodies including those from Australia, The Bahamas, Sweden, and the UK. The case was led by CFTC staff members Kyong J. Koh, Lauren E. Bennett, Jonah E. McCarthy, Paul G. Hayeck, and former staff member Luke B. Marsh.
Source: CFTC.gov
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