Mequon investment advisor Kay Yang is facing fraud charges after allegedly misappropriating more than $4 million of investors’ funds. The charges were filed April 13 by the Securities and Exchange Commission.
According to the SEC’s complaint, between April 2017 and April 2021, Yang, 40, and Xapphire LLC engaged in the unregistered offer and sale of securities issued by her entities AK Equity Group LLC and Xapphire Fund LLC. She raised approximately $16.5 million from 70 investors.
The complaint states Yang is a former tax preparer but has never been a CPA and has never been licensed by a securities regulator. Yang is also the vice president of 5XEN, Inc. The organization owns the 5XEN Super Asian Market at 6300 N 76th St.
Yang’s investors are residents of at least eight states and a majority of them are members of the Hmong-American communities in Wisconsin and Minnesota.
The complaint alleges that Yang falsely represented to prospective investors that she would invest their money primarily through foreign exchange trading, they could expect annual returns ranging from 20% to 50%, and the trading was consistently successful. However, Yang allegedly used less than half of the investors’ money for foreign exchange trading and had many months with large net trading losses, resulting in negative returns.
According to the criminal complaint, Yang and her husband used over $4 million of investor money to pay personal expenses which included gambling and cash withdrawals at casinos, real estate, extensive travel, luxury automobiles, and the repayment of certain investors from a previous venture.
Among Yang’s purchases were BTS concert tickets, a $110,000 trip for 60 guests referred to as “Kay’s Family Trip to Maui”, $46,000 worth of Amazon purchases, a $80,000 trip for more than 20 guests to Bangkok, and more.
On Feb. 23, 2022, a search warrant was issued authorizing a search of Yang’s home in Mequon to obtain financial and computer records.
“Yang’s fraudulent scheme has now collapsed, and most of her investors did not receive anything close to their promised returns,” reads the complaint. “Some have even lost their entire investment. But Yang has continued to raise additional funds for a new investment vehicle that she has described as ‘Xapphire G Fund.’”
The complain filed by the SEC seeks injunctive relief, disgorgement plus prejudgment interest, civil penalties, and a prohibition on Yang serving as the officer or director of a public company.
