IRS Criminal Investigation Launched

( A couple from Mequon, Wisconsin, is being sued by the federal government for their role in what is being called a massive Ponzi scheme.
Kay and Chao Yang are also facing an investigation into whether they committed any federal crimes.
Lawsuits were filed by two different agencies with the federal government, accusing the Yangs of defrauding investors in a scheme that was worth millions of dollars. They are accused of spending those funds on personal items such as luxury goods, real estate and extravagant vacations.
Kay is in charge of the development for 5XEN Market. The company that owns the market, 5XEN Inc., lists the Yangs address in Mequon as its address.
In a meeting of the city’s Licenses Committee that was held in September of 2020, Kay said:
“Basically, they were going into bankruptcy, so we came together to try to save them for our Hmong community.”
That community is now the target of the federal government, as Kay and her husband are being accused of this massive Ponzi scheme.
The Securities and Exchange Commission (SEC) as well as the Commodities Futures Trading Commission have filed civil lawsuits against the Yangs. The suits seek to stop the couple from being able to continue operating the investment business they owned.
Investigators have said that over the last four years, the couple raised $16 million at least from 70 investors. There were some profitable months reported by the couple, according to the investigators, but that was sporadic. In addition, the company’s overall losses that it reported were in contradiction to what they were telling their investors.
In total, the government agencies are alleging the Yangs misappropriated $4.6 million of their investor funds, at the least. They used roughly $1.4 million to purchase their home in Mequon, which sits on nine acres. They also purchased properties in three separate locations in Minnesota — Zimmerman, Sheboygan and Saukville.
They are also accused of spending $790,000 on living expenses, another $46,000 with Amazon, and in excess of $27,000 to Columbia College Chicago for tuition.
Other expenses they finances through the alleged fraudulent transactions were luxury goods, some tickets to concerts, family and personal travel that totaled in excess of $500,000, luxury cars and many cash withdrawals that occurred at 20 different casinos throughout the U.S.
The investment funds the Yangs ran, known as Xapphire and AK Equity Group, were run out of an office park in Mequon. If you call the number that is listed for the business, it goes straight to a voicemail.
The market they talked about was foreclosed on earlier in 2022. A default judgment was also filed by a Wisconsin county judge over unpaid city property taxes.
In February, IRS agents arrived at the Yangs’ home and took many different documents and cash from them, in an apparent search for evidence of money laundering and wire fraud.
Thus far, the couple hasn’t been charged with any crime, though it’s certainly a possibility that could change in the future.