SEC: Team Vinh a $3 million dollar Ponzi scheme
Team Vinh launched in late 2012 as a HYIP scheme and downline builder for owner Vu H. Le (also known as Vinh H. Le).
TeamVinh.com International is going to revolutionize the MLM industry.
TeamVinh International is NOT IN ANY WAY A MLM COMPANY TeamVimh is going to take certain MLM companies and make them successful.
It cost $39 to join. There is no recruting (sic) for a down line, they do it all for you. No selling, no nothing. It’s (sic) is well worth looking at.
In addition to investing in Vpacks, Team Vinh investors were fed into seedy schemes that populated the MLM underbelly at the time. Most, if not all of these schemes were either HYIP scams or Ponzi and pyramid schemes themselves.
Here at BehindMLM I’d received numerous requests to review Team Vinh over the years, but without an actual MLM compensation plan there wasn’t much to review.
Within the context of Team Vinh being a downline feeder into other MLM opportunities however, news today that the SEC have filed a lawsuit against Team Vinh and Vu H. Le.
Despite promotion in MLM circles kicking off in 2012, turns out Le began scamming people back in 2010.
From 2010 through the present, Le and TeamVinh fraudulently raised more than $3 million from over 5,600 investors throughout the United States and in various foreign countries.
In spiels such as that quoted in the opening paragraphs of this article, Le ‘defrauded investors by falsely portraying TeamVinh as a successful company connected to the world of multi-level marketing (“MLM”)‘.
Team Vinh and Le spent little, if any, investor funds on actual business or MLM operations.
Instead, Le, a recidivist, misappropriated the overwhelming majority of the investors’ money for himself, including by gambling more than $2 million of investor funds at a Las Vegas casino.
Regarding the nature of Team Vinh fraud itself, there were three primary components to the scheme:
Defendants fraudulently raised funds in at least three ways.
First, Defendants lured people into buying memberships in a program that Le and TeamVinh claimed to be a referral network that investors could use to earn an income from MLM companies without the investors having to do any work.
Second, Defendants sold investment contracts in TeamVinh itself, promising investors a percentage of TeamVinh’s profits.
Third, Defendants sought investments in a purported commodities trading platform run by Le, with Le guaranteeing investors 5% weekly returns.
The first method is the aforementioned downline builder, which saw Le collect recruitment/referral commissions for pushing his investors into rival MLM underbelly opportunities.
The second and third methods detail the inhouse HYIP scheme Team Vinh ran, which was a combination of Ponzi revenue-share and guaranteed weekly ROIs.
Investments solicited by Team Vinh ranged from $40 to $24,995.
None of these investments had any legitimacy.
Investors never received the promised payments, yet Le continuously used investor money for his own benefit.
Specifically, Le distributed the funds he raised to a variety of companies, friends, and business associates, and used most of the money for his own lavish lifestyle, including the aforementioned casino gambling.
What’s particularly worrying, is that had investors of done their due diligence on Le, they’d have likely discovered
Vu H. Le a/k/a Vinh H. Le, age 39, resides in the District of Minnesota.
In 1995, Le was convicted of forgery in Wisconsin, for passing bad checks, and served a
two-year prison sentence.
In 2007, the States of Wisconsin and Minnesota barred Le from offering or selling securities in those states based on Le’s involvement in a real estate scam.
TeamVinh.com LLC is a Minnesota limited liability company which claims to have its United States home office in Hopkins, Minnesota.
Le incorporated TeamVinh in January 2009. TeamVinh securities are not registered with the SEC.
The initial Team Vinh offering didn’t have the attached 5% weekly ROI, with Le introducing it as the scheme began to collapse.
When investments in the TeamVinh membership and investor programs began to dry up, Le solicited investments in a purported commodities trading platform in which he personally guaranteed investors 5% weekly returns.
That however only put off the inevitable, with the SEC pegging a collapse around September 2014.
Le fraudulently offered all three investments by promising to award a share in the profits based on the percentage of the total invested, while hiding from investors that their promised returns were dependent on a stream of new investor money.
From time to time we’ve seen MLM underbelly schemes attempt to hide behind an SEC Form D.
Rule 506 of Regulation D is considered a “safe harbor” for the private offering exemption of Section 4(a)(2) of the Securities Act. Companies relying on the Rule 506 exemption can raise an unlimited amount of money.
The problem is a Form D exemption requires no public advertising of a securities offering, with the offering itself required to be only made available to “accredited investors”.
As the SEC noted:
TeamVinh offered the securities to any person willing to invest, without regard to the offeree’s level of financial sophistication.
Moreover, Team Vinh offered and sold securities to investors who were not accredited and did nothing to ensure that investors were accredited.
This is pretty much the case with all MLM underbelly schemes who profess to have obtained Form D exemption.
For his part in the orchestration of a $3 million dollar Ponzi scheme, the SEC have filed eight counts of fraud against Vu H. Le.
Five of the counts are violations of the Securies Act, and the other three violations of the Exchange Act.
The SEC respectfully requests that this Court find that Le and TeamVinh committed the violations alleged herein and find that, as a result of these violations, Le and TeamVinh received ill-gotten gains.
The SEC are seeking a disgorgement judgement (plus interest), civil penalties and a permanent injunction.
Given Le’s fraudulent past, there’s a good chance that criminal charges might follow at some point. At the time of publication however, none have yet to surface.
TeamVinh and owner/operator Vu Le will also pay a $320,000 combined civil penalty fine.