State official
s allege Xiao “Mark” Hu defrauded at least 15 investors and diverted hundreds of thousands of dollars for personal expenses, including a Florida home and private school tuition.
New Jersey’s Bureau of Securities has filed a civil lawsuit against a former Princeton resident accused of defrauding investors out of at least $2.5 million through what authorities describe as a fraudulent investment scheme tied to technology and artificial intelligence ventures. State officials allege Xiao “Mark” Hu sold unregistered securities, made false promises to investors and used investor money to fund his personal lifestyle.
Key Points
• New Jersey alleges Xiao “Mark” Hu defrauded investors out of at least $2.5 million.
• Authorities claim investor funds were used for a Florida home, vacations and tuition payments.
• Hu is also facing criminal charges stemming from the alleged investment scheme.
According to a complaint filed in Mercer County Superior Court, Hu operated through Skyline Technology USA LLC and Thunderbirds.ME, Inc., offering investment opportunities tied to technology and AI development projects. The Bureau of Securities alleges the offerings included stock sales, sponsorship agreements and investment contracts that were neither properly registered nor legally offered.
State investigators identified at least 15 investors, including nine New Jersey residents, who allegedly invested money with Hu based on promises of substantial returns.
Investors Allegedly Misled
The lawsuit alleges Hu falsely promised annual returns ranging from 10% to 22% while presenting himself as a highly credentialed technology entrepreneur. Authorities claim he frequently told investors he held a Ph.D. in Computer Science from Columbia University, a representation the state alleges was false.
Officials also allege Hu targeted members of the Asian American community in the Princeton area through WeChat and in-person seminars held at the Princeton Public Library.
“Our lawsuit alleges that Mark Hu exploited investors’ trust, swindling them and diverted their money for his own personal gain instead of legitimate business purposes,” Attorney General Jennifer Davenport said. “My office will continue holding bad actors accountable and safeguarding the financial security of all New Jerseyans.”
Funds Allegedly Used for Personal Expenses
According to the complaint, Hu commingled investor funds with personal accounts and misappropriated at least $280,000 for personal use. Authorities allege the money was used to purchase a new home in Florida, pay for a tropical vacation and cover private school and college tuition expenses for his children.
“As we will show, Mark Hu deceived investors into believing they were participating in a legitimate opportunity to grow their money, when in reality the only person profiting from these sham securities was Hu himself,” said Jeremy E. Hollander, acting director of the Division of Consumer Affairs.
The lawsuit seeks restitution for investors, civil penalties, disgorgement of profits and a permanent ban preventing Hu and his companies from offering or selling securities in New Jersey.
Criminal Case Also Pending
In addition to the civil lawsuit, Hu is facing criminal prosecution stemming from the alleged sale of securities connected to Skyline Technology USA LLC. A state grand jury indicted him in February on charges including securities fraud, theft by deception, money laundering and misconduct by a corporate official.
Acting Bureau Chief Keith A. Alt said the case highlights the importance of thoroughly researching investment opportunities before committing money.
“Financial fraudsters often target people with whom they share personal, professional, or community connections in order to quickly build trust and neutralize skepticism,” Alt said. “Investors should always research any investment opportunity thoroughly, verify that the securities and those selling the securities are properly registered, and ask for clear, written financial information before committing their money.”
The allegations contained in the civil complaint and criminal indictment remain accusations, and Hu has not been found liable or guilty in court.