Alamo man charged in $39 million basketball ticket Ponzi scheme
SAN FRANCISCO -- An East Bay man is facing federal charges of fraud and money laundering for an alleged multi-million Ponzi scheme involving the sale of pro basketball tickets and luxury suites at San Francisco's Chase Center, the Oakland Arena, and the Staples Center in Los Angeles.
Alamo resident Derek Vincent Chu, 41, was arrested Tuesday morning and made an initial appearance in court following a federal grand jury indictment on April 26, according to a press statement from U.S. Attorney Ismail Ramsey.
The indictment alleges that between late 2013 and 2020, Chu used several companies to raise $39 million by fraudulently soliciting investments to buy and resell NBA tickets and luxury suites at the current and former home arenas for the Golden State Warriors and at the arena shared by the Los Angeles Lakers and Los Angeles Clippers, currently known as Crypto.com Arena.
Chu allegedly induced investors by making false misrepresentations, including how the investor funds would be used, how investors would be repaid, and whether the investments were secured by collateral. More than 100 victims were defrauded in the alleged scheme.
According to the indictment, Chu used investor money being used to repay other earlier investors and for other unrelated expenses and diverted $7.3 million of investor funds for his own personal use. Chu allegedly used investor funds to pay for his own travel, on luxury automobile and jewelry purchases, and to pay his credit card debts and utility bills, among other things.
Chu was charged with eight counts of wire fraud and three counts of money laundering. His next court appearance was scheduled for May 10.
If convicted, Chu faces a maximum sentence of 20 years in prison and a $250,000 fine for each wire fraud charge, and a maximum of 10 years in prison and a $250,000 fine for each money laundering charge. Any sentence would take into account federal sentencing guidelines and other factors.
Prosecutors urged anyone who believes they may be a victim in this case to contact the U.S. Attorney's Office for the Northern District of California's victim specialists by email at: USACAN.DCVictimAsst@usdoj.gov.
