In its complaint filed in July 2015, the SEC alleged that the Luca Entities, their CEO Bingqing Yang and her chief fundraiser Lily Lei orchestrated a fraudulent scheme targeting the Chinese American community as well as investors in Asia to invest in unregistered offerings of securities. According to the complaint, Yang and Lei represented to investors that their money would be invested in oil and gas drilling operations, that they could expect annual rates of return of 20 30 percent, and that their investments were risk free. In reality, as the complaint alleges, Yang, the Luca Entities and Lei deceived investors by misrepresenting that their operations as successful and projecting outsized investment returns, all while knowing the operations were losing millions of dollars and the enterprise was sinking under a mountain of debt.

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