CKB168 scammers plead guilty, settle with SEC for over $2.1 million
Cheongwha “Heywood” Chang and Toni Tong Chen were top affiliates in the CKB168 pyramid scheme.
For those unfamiliar with the scam, CKB168
misrepresented (itself) as a legitimate and profitable MLM company that sells web-based children’s educational courses when, in fact, CKB ha(d) little or no retail consumer sales and no apparent source of revenue other than money received from new investors.
CKB168 primarily targeted the Asian-American community in California, with the company accused of stealing ‘tens of millions of dollars from investors in the United States, Canada, Taiwan, Hong Kong, and other countries in Asia.‘
In October 2013 the SEC shut down CKB168 via a lawsuit against 16 CKB168 executives and top affiliates.
Chang and Chen are both based out of the US and their settlement reflects alleged violations of the Securities Exchange Act.
The settlement also mentions the pair have plead guilty in concurrent criminal proceedings.
Defendants Chang and Chen consented to the entry of the settled judgments, which permanently enjoin each of them from violating the unregistered offering provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, the anti-fraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the unregistered broker-dealer provisions of Section 15(a) of the Exchange Act.
Chang and Chen also agreed to conduct-based injunctions that prohibit each of them from participating in an illegal pyramid scheme disguised as a multi-level marketing program.
In settling the SEC’s charges against them, Chen and Chang each acknowledged having entered into written agreements to plead guilty in a parallel criminal action in which they each admitted that CKB was an investment scheme.
The total amount Chen and Chang will surrender to the SEC is $2,101,949.81 plus civil penalties to be decided at a later date.
Chen has also
agreed to be permanently suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.
Five corporate defendants in the lawsuit have already defaulted. Litigation against the remaining CKB168 defendants continues…
Update 26th January 2022 – Heidi Mao, another CKB168 defendant, has settled with the SEC.
Mao consented to the entry of the judgment, which permanently enjoins her from violating the (Securities and Exchange Act).
Mao also agreed to conduct-based injunctions that prohibit her from participating in an illegal pyramid scheme disguised as a multi-level marketing program. The final judgment orders Mao to pay disgorgement of $449,729 and a civil penalty of $335,000.
The SEC continues to litigate to obtain final judgments against the remaining non-settling defendants and the corporate defendants.
Considering this one started in 2013, we’re coming up on almost a decade of litigation. Impressive.
Update 18th August 2022 – The SEC has secured a final judgment against the remaining CKB168 defendants.
This wraps up the civil case. BehindMLM’s latest CKB168 update also goes over the CKB168 prison sentences.
i want to know when i can claim the lost in CKB168?
No word on a Receiver. Most of the CKB168 victims were from China IIRC, so I wouldn’t hold your breath.
weida zhou, are you here in States or overseas???
(Ozedit: Attempt to take discussion offsite removed)
Oz…are you victim too?? Why you not being more positive about us getting some money back?
Because being positive doesn’t help Ponzi victims. Unless a Receiver is appointed you’re not getting any money back.
The chance of that happening isn’t good. It might not be “positive” but it’s reality.
We are victims, how for our next stop to have some money back?
I don’t think there is a “next stop” two years after the fact.
You could try contacting the SEC but I don’t like your chances.
Latest info on SEC website regarding CKB168
There’s a contact email address at the bottom. Good luck.
Need to know any progress to this case.
CKB168 scammers settled. Case over.
Article updated with Heidi Mao settlement.