wcm777-logoIn addition to enriching himself with stolen Ponzi funds, WCM777 owner Phil Ming Xu also splashed out on his family.

Through Xu’s efforts at investment fraud, his sister Sue Wang and mother Xiao Mei Deng received $2.5 million dollars.

Some of that money went to buying Xu’s mother a house and some of it to fund his sister’s business ideas. The rest of it was put towards existing mortgages and general expenses.

Having learned of Xu enriching his family, the Receiver approached Wang and Deng about returning the stolen money.

$1.1 million dollars has since been recovered, with $1.4 million in cash and assets unaccounted for.

Wang and Deng initially failed to respond to the Receiver’s attempts to recover the funds, prompting the filing of a lawsuit in March, 2015.

Continuing their “ignore it and it will go away” strategy, Wang and Deng mostly ignored the proceedings against them. They did however attempt to circumvent the proceedings by transferring the title of the properties they bought to individuals located in China.

Nonetheless, due to an overall lack of participation in the proceedings, default judgement was entered against Wang and Deng on January 4th, 2016.

Forced to reckon with the legal proceedings against them, Wang and Deng then finally entered into settlement negotiations with the Receiver.

Those negotiations have borne fruit, with Wang and Deng agreeing to return $1.17 million dollars.

Subject to court approval, $50,000 will be paid within three days of an entry approving the settlement. An additional $1,075,000 will be paid within 60 days of the approval order.

Should the amounts not be paid, the Receiver will assume control of two properties purchased in full or partly with the stolen funds.

All in all the settlement comes up $275,000 short, which I suppose is money that is gone. It’s not perfect but it’s better than nothing, as the Receiver explains in a filed declaration;

Without the proposed settlement, I understand the Wang Parties would not have coordinated voluntary return of title(s) … and new claims would have to be asserted to avoid the fraudulent transfers of these properties by Wang.

Furthermore, efforts to collect on the judgement against the Wang parties would necessarily entail additional expenses and further reduce the amount of net cash recovery fo the estate.

Moreover, the proposed settlement with the Wang parties will net a recovery of approximately 80% of the amount of the estate’s claim.

The proposed settlement agreement was filed on February 18th. It’s expected the agreement will be approved sometime in the coming weeks.


Update 15th March 2016 – On March 10th 2016, Judge Walter signed off on the WCM777 Receiver’s proposed settlement.

For the reasons stated in the moving papers, and in light of the fact that no opposition was filed, Court concludes that the settlement agreement is fair and equitable and will likely generate the highest net recovery for the receivership estate.

Accordingly, the Receiver’s Motion for Approval of Settlement with Sue Wang, Xiaomei Deng, Mana Fashion, Inc., and Saza Investment LLC is GRANTED.

A copy of the settlement approval is available on the WCM777 Receivership website.