Due to the lapse in appropriations, Department of Justice websites will not be regularly updated. The Department’s essential law enforcement and national security functions will continue. Please refer to the Department of Justice’s contingency plan for more information.

You are here

Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

Monday, January 14, 2013

International Hedge Fund Founder Sentenced To 12 Years In Prison For Investment Fraud

SAN JOSE, Calif. – An international hedge fund founder was sentenced today to 12 years in prison for wire fraud arising out of a white collar investment fraud scheme that defrauded multiple investors out of millions of dollars, United States Attorney Melinda Haag announced.

Following a three week trial, a federal jury on June 20, 2012, convicted Albert Ke-Jeng Hu, 51, formerly of Fremont, Calif., and Hong Kong, of seven counts of wire fraud in violation of Title 18, United States Code, Section 1343. Evidence at trial showed that Hu carried out an investment fraud scheme from 2002 to 2008 that defrauded multiple investors of millions of dollars. Hu founded and operated hedge funds under the names Asenqua Beta Fund and Fireside LS Fund out of locations in San Francisco, Sunnyvale and Singapore. Hu lied to investors by telling them that he had more than $200 million in his hedge funds and that they would receive rates of return as high as 20 to 30 percent a year. Hu also lied about entities that were supposedly affiliated with his hedge funds, such as a prominent law firm, an auditing firm, a hedge fund administrator and a chief financial officer. In reality, none of those entities ever had any connection with Hu’s hedge funds. Evidence at trial showed that Hu targeted prominent members of the Chinese-American business community in Silicon Valley as part of his investment fraud scheme. Ultimately, Hu invested virtually none of his investors’ money, instead diverting it to pay his own personal expenses as well as prior investors and others.

In sentencing Hu, U.S. District Court Judge Ronald M. Whyte emphasized the sophistication of Hu’s fraudulent scheme that “took a lot of money from a group of people and had a major impact on their lives." In imposing sentence, Judge Whyte also stressed the need “to send a message that this type of fraud should not be tolerated.”

Hu has been in custody since his arrest in Hong Kong on March 17, 2009. After the United States successfully obtained Hu’s extradition from Hong Kong, former United States Magistrate Judge Patricia V. Trumbull in 2009 granted the United States motion to have Hu detained pending trial as a flight risk. Judge Whyte also sentenced the defendant to three-year period of supervised release and ordered a hearing on restitution to take place on March 18, 2013.

Assistant United States Attorneys Joseph Fazioli and Timothy Lucey prosecuted the case with the assistance of Legal Assistants Nina Burney and Kamille Singh and Paralegal Specialist Lakisha Holliman. The prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation. The United States Attorney’s Office recognizes the substantial and valuable assistance in this matter of the San Francisco Regional Office of the Securities and Exchange Commission and the Office of International Affairs of the Department of Justice.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

(Albert Hu Indictment )














Updated November 18, 2014