January 26, 2016 Comments (0) Blog, Securities Fraud

Bankrupt Oil Company Accused of Fraud

(Last Updated On: January 26, 2016)

According to the Houston Business Journal, Luca International Group LLC, an independent oil and gas company, filed for Chapter 11 bankruptcy protection in response to multiple lawsuits steaming from allegations of fraud.

In a press release, the Securities and Exchange Commission (SEC) charged Luca International Group LLC and its CEO with running a $68 million Ponzi-like scheme and affinity fraud. The SEC alleged Yang falsely claimed that the company was a profitable oil and gas drilling operation and promised returns of up to 30%. Yang is accused of commingling investors funds and making purported profit payments to old investors with new investor’s money. In addition, the SEC alleged Yang diverted $2.4 million in investors funds to purchase a luxury house and other personal expenses.

Yang and Luca international are accused of targeting Chinese-Americans through television, radio, and newspaper advertisements.  Furthermore, Yang is accused of offering Chinese citizens the chance to apply for permanent residency through the EB-5 program.

The Houston Business journal reports that some investors have filed a class action law suit, alleging Luca international falsely raised $68 million from investors purportedly to purchase interest in oil and gas ventures and allege that Luca owes the investors $748 million.

Unfortunately for investors,  the SEC claim, “Luca International Group was earning no profits and sinking under a mountain of debt.”

According to Oil and Gas Investor, Luca International only has approximately $2.6 million in assets. “By the time the company filed for bankruptcy in August, Luca International had whittled nearly $70 million in investments down to $8,173.55, federal court filings show.”

The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.  The firm is investigating whether brokerage firms that recommended Luca International may have liability for those recommendations.

For more information on the firm and its securities arbitration practice, visit www.whitesecuritieslaw.com.