Ponzi scheme targets worldwide Tongan community
Pago pago, AMERICAN SAMOA — The U.S Federal Bureau of Investigation (FBI) is seeking to identify possible victims of a fraud scheme operated by Tilila Siola’a Walker Sumchai, who is facing federal charges at the federal court for the Eastern District of California, for defrauding the Tongan Community out of $13 million in an international Ponzi scheme.
Meanwhile, the U.S. Securities and Exchange Commission (S.E.C) filed a separate complaint against, Walker Sumchai for violating the antifraud provisions of the federal securities laws.
Walker Sumchai is charged in a 30-count indictment handed down by a federal grand jury on Sept. 14, in which she is accused of operating the scheme from her office in Stockton, California, defrauding investors in the United States, Australia, and New Zealand.
And federal prosecutors in a statement describe the defendant’s investment program as an “international Ponzi scheme.”
The defendant was arraigned on Sept. 19, which was also her initial appearance hearing, where she entered not guilty pleas to all 30 counts. And she was to be released on an unsecured bond, with several conditions set by the court.
The charges and arrest of Walker Sumchai — as information was released by the U.S. Justice Department (USDOJ) — quickly spread on social media, with several postings uploaded on Facebook pages and re-posted by others. Several commenters didn’t hold back on their negative reaction towards the defendant while one post asked people not to quickly make judgment calls.
In announcing the charges, the USDOJ also said that the FBI is seeking to identify possible victims of Tilila Siola’a Walker Sumchai. If you believe that you were victimized by Walker Sumchai or have information relevant to this investigation, please complete the online form available online (https://www.fbi.gov/tongitupevictims).
One social media posting, with ties to the Tongan community in the U.S. reposted this same link, and FBI information, calling on victims of the scheme to fill out the online FBI form. “I know a lot of family were sold this dream if they invest and [are] now living the consequences. Don’t feel sorry, LET’S GET JUSTICE for all the hardworking people she scammed,” the message said.
Samoa News reached out to some members of the local Tongan community regarding this scheme, and only three residents responded by saying only that they had heard of this investment program from relatives in the U.S and New Zealand but didn’t elaborate if any investments were made on their behalf or their off-island family members. Samoa News did share with them the FBI contact information for victims of the scheme.
For the federal indictment, it charges the 61-year old defendant — the sole owner of an investment program called, “Tongi Tupe” — with wire fraud, mail fraud, securities fraud, and the sale of unregistered securities. The indictment alleges that the defendant “solicited primarily Tongan investors, recruited members of the Tongan community to recruit new investors calling them chapter presidents.”
Between January 2021 and October 2021, Walker Sumchai orchestrated a scheme to defraud investors in the United States, Australia, and New Zealand from her Stockton office, the indictment alleges.
Claiming to use a “secret algorithm”, Walker Sumchai promised investors that if they gave her money to purchase shares of the “Tongi Tupe” investment program, she would invest the money, and they would receive their principal investments back and thousands of dollars in returns within weeks or months.
(Algorithm is a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.)
She also promised investors that if they gave her $30,000, within months they would receive a home in Lodi, California, worth approximately $480,000. Instead, she took investors’ money and used it for her own personal expenses, including gambling, and used it to pay back and lull earlier investors, according to court documents.
More than 1,000 investors invested over $13 million with Walker Sumchai, whom court documents say was also the CEO of the non-profit group, PATOA, which was incorporated in California in December 2020. And some of the investors made their check payments to PATOA.
Another part of the “Tongi Tupe” scheme, was the defendant’s “home building program” in which investors designated money for this program, with the promise of new homes for the investor, but prosecutors said, nothing materialized.
Instead of investing the money she obtained through the whole scheme, Walker Sumchai used the money for her own personal expenses including gambling at casinos, hotels, airline tickets, and gas, according to the indictment.
She also “lulled” investors by taking money from later investors and using it to pay earlier investors in order to create the false appearance that the investment was successful and to prevent discovery of the fraud scheme, according to the indictment.
It also says that Walker Sumchai solicited investors through meetings with individuals, telephone calls, postings on the internet and word of mouth. She communicated with investors via Facebook Live and Facebook message, among other means of communication.
According to the indictment, Walker Sumchai had neither the intention, ability, expertise or financial means to repay the investments or perform on the promises she made to prospective investors.
If convicted of mail fraud or wire fraud, the USDOJ said Walker Sumchai faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of conviction.
If convicted of securities fraud, Walker Sumchai faces a maximum statutory penalty of 20 years in prison and a $5 million fine. If convicted of the remaining securities-related counts in the indictment, she faces a maximum statutory penalty of five years in prison and a $10,000 fine for each count of conviction.
Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
For the S.E.C complaint, it was filed on Sept. 19 and alleges that Walker Sumchai raised approximately $11.8 million from more than 1,000 investors through a fraudulent securities offerings targeting members of the Tongan American community across the United States.
The complaint alleges that the defendant first targeted respected Tongan American leaders, who were paid substantial returns on their investments, which convinced many of the leaders to believe that Tongi Tupe was legitimate.
She would then organized meetings hosted by these leaders at which the defendant promoted the Tongi Tupe program to other members of the Tongan American community.
The SEC’s complaint, filed in U.S. District Court for the Eastern District of California, charges Walker Sumchai with violating the antifraud provisions of the federal securities laws.