Bich Quyen Nguyen Gets 12-plus Years and $24.5 mil Payback Order for Investment Scam
Madame Nguyen's Ponzi scheme screwed 200 people out of $24 million.
Photo by flickr user Jeremy Brooks
"Madame" Bich Quyen Nguyen, CEO of Sun Investments Savings and Loan, told would-be investors that her Swedish company had embarked on a new program to seek business from less-wealthy customers than usual by accepting individual investments of at least $1 million. In exchange for purchasing her high-yield certificates of deposit, Madame Nguyen guaranteed annual returns of 36-200 percent.
But as it turns out, there was a huge problem with the wealth-building strategy: Sun Investments Savings and Loan did not exist.
Over at the Reagan courthouse in Santa Ana Tuesday, U.S. District Court Judge Josephine L. Staton, citing the physical, emotional and psychological harm Nguyen inflicted on 200 people who lost $24 million to her Ponzi scheme, sentenced the 60-year-old San Jose woman to more than 12 years in federal prison. Staton also ordered Nguyen to pay $24,517,482 in restitution.
For math majors who quickly figured out that a $1 million investment times 200 people should add up to $200 million, know this: the vast majority of investors were not individual millionaires but groups of people who formed clubs in places like Anaheim and Rialto to pull together at least $1 million per club to invest with Nguyen, who often made her presentations in churches (and routinely broke that commandment about lying).
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One such place of worship was Cathedral of Praise in Rialto, where fliers about the "Super Million Dollar Program" investment vehicle drew folks to the "Sun Group Event for Succes [sic]." The audience heard impeccably dressed Nguyen say she normally only works with investors holding $100 million or more but that she'd make an exception for the church's Tycoon Club. When asked for details of the investment techniques, Nguyen explained they were very complicated and that it took months to train investment bankers, who were still unable to comprehend what she did, according to the federal complaint.
At Sun Group or Sun Investment Savings and Loan presentations throughout Southern California and Nevada during the second half of 2008, Nguyen vaguely explained how she used "trading platforms" to make high-speed and high-frequency trades that led to high rates of return. She assured her victims that their investments would be safe because their money would be in "blocked" accounts. She even claimed that she had prepared for the 2008 financial crisis in advance to protect and guarantee these high returns. Some gave up their life savings to the fraud, and some were forced to put off their retirements, according to federal prosecutors.
After investigations by the FBI and the Securities and Exchange Commission, the SEC in the spring of 2009 obtained orders from federal Judge David O. Carter in Santa Ana that aimed to prevent Nguyen and her co-conspirators from continuing to offer the investments. Forensic accountants determined that the victims' money was never safe, that new customers' investments helped make interest payments to old investors (while also helping make Nguyen and her cohorts rich)--ladies and germs, the classic Ponzi model.
Despite Carter's orders, Nguyen in May and July 2009 continued to offer investments in Las Vegas and overseas, according to federal prosecutors, who described her in sentencing papers as being "relentless in the execution of her fraud," of showing no remorse once she was exposed and of trying at trial to blame the scheme on a dead man.
A jury in December 2013 found Nguyen guilty of conspiring to commit wire fraud, and she has been locked up ever since as Staton remanded her into custody immediately after trial. Nguyen's co-conspirator, 70-year-old Johnny Edward Johnson of Northern California, pleaded guilty to conspiracy to commit wire fraud and faces up to 20 years in federal prison at his Feb. 27 sentencing in Staton's courtroom.