Trenton, NJ – A Mercer County technology executive who promoted artificial intelligence trading products has been indicted on charges he orchestrated a million-dollar securities fraud scheme that prosecutors say operated like a Ponzi operation.
Acting Attorney General Jennifer Davenport announced Thursday that a state grand jury returned an indictment against Xiao Hu, also known as Mark Hu, 55, formerly of Princeton and now residing in Orlando, Florida. Hu is the chief executive officer of Skyline Technologies USA LLC, a company prosecutors allege misrepresented its development and use of AI-driven trading products.
Hu is charged with two counts of securities fraud, one count of theft by deception, two counts of money laundering, and one count of misconduct by a corporate official. The charges stem from an investigation led by the Division of Criminal Justice and the Office of Securities Fraud and Financial Crimes Prosecutions.
According to the indictment, from August 2019 through November 2023, Hu allegedly induced five victims to invest approximately $400,000 by claiming Skyline had developed and was using an AI trading program that would guarantee annual returns between 10 percent and 22 percent. Prosecutors allege he also persuaded another investor to contribute roughly $600,000 based on representations about the company’s technology products and how the funds would be used.
In total, more than $1 million was allegedly obtained from investors. Prosecutors claim Skyline had not developed or deployed the AI trading program or related products as described, and that much of the money was either used to pay earlier investors or diverted for personal expenses.
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- CEO Xiao Hu indicted on multiple fraud and financial crime charges
- Prosecutors allege more than $1 million taken from six investors
- Funds allegedly used to pay prior investors and cover personal expenses
Allegations of Ponzi-style payments and personal spending
The indictment alleges Hu laundered investor funds in a manner consistent with a Ponzi scheme, using incoming investments to make payments presented as returns to earlier investors. Prosecutors further allege he siphoned funds for personal expenses, including payments toward a home, luxury vehicles, private school tuition, mortgage obligations, and credit card bills.
The Office of the Attorney General stated that the charges are accusations and that Hu is presumed innocent unless and until proven guilty in court. If convicted, second-degree crimes in New Jersey carry a potential sentence of up to 10 years in state prison and fines of up to $150,000, while third-degree crimes carry up to five years in prison and fines of up to $15,000.
The case was announced by the New Jersey Office of the Attorney General and remains pending in state court. Additional information on statewide financial crime enforcement can be found through reports on financial crimes investigations across New Jersey.
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