Silicon Valley Hedge Fund Manager Arrested in Hong Kong on Embezzlement Charges

SAN JOSE, CA—A Silicon Valley Hedge Fund manager was arrested yesterday in Hong Kong on a provisional arrest warrant requested by the United States government that related to six counts of wire fraud, United States Attorney Joseph P. Russoniello announced.

According to the criminal complaint filed in San Jose federal district court on January 26 and unsealed this morning, the defendant, Albert Ke-Jeng Hu, 47, carried out an investment fraud scheme involving hedge funds that he administered from 2002 to 2008. Hu and others told potential investors that they were operating hedge funds under the names Asenqua Beta Fund and Fireside LS Fund out of locations in Sunnyvale, San Francisco and elsewhere in the Northern District of California. The complaint alleges that Hu caused victims to invest by promising them rates of returns as high as 20 to 30 percent a year. Additionally, Hu and others made several false representations regarding entities that were supposedly affiliated with those hedge funds, such as a prominent law firm, a fund administrator, an independent auditing firm, and a chief financial officer. The complaint alleges that neither the law firm, the fund administrator, nor the CFO ever had any connection with Hu’s hedge funds. As a result of Hu’s fraud, victim-investors sent at least $3 million to accounts in the United States and overseas, which Hu controlled.

Hu appeared in a Hong Kong court yesterday. He is next scheduled to appear in Hong Kong court on March 25 when his potential extradition to the United States will be addressed.

The maximum statutory penalty for wire fraud in violation of Title 18, United States Code, Sections 1343 is twenty years in prison and a fine of $250,000, plus restitution. Any sentence following conviction would, however, be determined by the court after considering the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court.

Joseph Fazioli is the Assistant United States Attorney who is prosecuting the case with the assistance of Legal Assistant Jeanne Carstensen. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Securities and Exchange Commission.

Please note, a criminal complaint contains only allegations against an individual and, as with all defendants, Mr. Hu must be presumed innocent unless and until convicted.

Further Information:

Case #: 09-70057 PVT

A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.