Steve Chen’s wife relinquishes $3.2 million in stolen USFIA funds
Through Ally Investors LLC and other shell companies, Steve Chen’s wife, Li Zhao (aka Jennifer Zhao), received around $3.37 million in stolen USFIA investor funds.
In 2015 the USFIA Receiver recovered approximately $3.2 million from a safe deposit box and bank accounts held in Ally Investors’ name.
The seizure saw Li Zhao, the primary beneficiary of the funds, respond with fury and demand the funds be returned to her.
Roughly three years later, Zhao and the USFIA Receiver have finally reached a settlement.
As part of the proposed settlement, Zhao will relinquish her interest in the seized $3.2 million Ally Investor funds.
The settlement will also see the same of Yanhong Wu and Qi Chen, two additional beneficiaries of Ally Investor funds.
We don’t seem to know much about Wu and Chen, other than they reside in China and are presumably close to Chen’s wife, Zhao.
The proposed settlement also stipulates the Receiver will drop a separately filed clawback lawsuit against Zhao, which sought to recover an additional $370,000.
The compromise is $3.2 million is returned to USFIA victims and Zhao keeps the $370,000 stolen amount.
It’s not a perfect settlement but seeing as the $370,000 has been laundered through several shell companies, perhaps the simplest financially.
The Receiver believes the proposed settlement, which
(a) eliminates the Ally Claimants’ claims that approximately $3.2 million held by the Receiver belongs to them outright; and
(b) avoids costly fraudulent transfer litigation with Zhao with an uncertain recovery, is in the best interests of the receivership estate.
The proposed settlement between the USFIA Receiver and Li Zhao was filed on November 29th. Approval by the court remains pending.
Update February 6th 2019 – The USFIA Receiver’s proposed settlement with Li Zhao was approved on January 9th, 2019.