The US District Court for the Southern District of California sentenced former La Jolla broker James Yiu Lee to 6.5 years in prison and ordered restitution in excess of $10.5 million for losses incurred by clients as a result of Lee's ill-fated and purportedly illegal trading activity.
Public records indicate Lee received his first fraud and embezzlement conviction in 1997 after defrauding investors and stealing from their pension funds. For this crime, Lee received a 2.5 year sentence.
The court found that, upon his release, Lee began a new fraudulent scheme in San Diego and sought clients for online trading under the false pretense that Lee was a certified public accountant, who also held PhD, JD and MBA degrees. The FBI said Lee also failed to disclose his 1997 felony fraud conviction to his new customers.
Falsely claiming he would cover have of any clients' realized losses, Lee instructed customers to send management fees and half of their profits to bank accounts opened in the name of several shell corporations Lee controlled, owned or had access to, such as ELX Int. Inc., which inaccurately failed to list Lee as an officer or associate.
The findings state that as Lee transferred funds from one shell to another, he also spent thousands of investor dollars on personal expenses, including high-end merchandise and international travel.
Lastly, prosecutors said that to cover his clients' significant losses, which some victims said were all of their life savings, Lee tried concealing the truth with restructured billing invoices and falsified documents attempting to bill clients for gains that did not exist.
In October, Lee pleaded guilty to obstructing justice.
If you have invested with fJames Yiu Lee or with any broker or financial adviser whose solicitation of funds through misrepresentation, false promises or other fraudulent activities have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.