DETROIT – Dozens of Southeast Michigan investors were cheated out of tens of millions of dollars as part of a $100 million Ponzi scheme, federal authorities said.
QYU Holdings
Last year, federal officials launched an investigation into a self-proclaimed investment company called QYU Holdings.
The company is operated by Darren Anthony Robinson, 53, a United States citizen working out of Panama.
QYU Holdings claimed to be a professional trading firm that could generate incredibly high returns for investors. One document said a $100,000 investment in 2014 would have grown to more than $2 million by 2021.
QYU Holdings told potential investors that the company hadn’t had a single net losing monthly return from 2014 through 2021.
“QYU’s marketing materials represented that its ‘strength in trading, or QYU’s edge, is built on our exceptional understanding and analysis of the nuances of the US economy and our expert skill in dealing with financial markets,’” a criminal complaint (unsealed Tuesday, June 27, 2023) reads.
The company said it operated out of Panama and the Cayman Islands and did not charge a management fee. QYU Holdings would earn 30% of profits as long as investors reached a certain profit threshold from trading activity, according to the company.
Michigan investors
In March 2023, a QYU Holdings investor from Southeast Michigan told federal authorities that he had invested more than $1 million with the company since 2019.
Throughout the course of the investigation, officials said they identified dozens of apparent QYU Holdings investors from Southeast Michigan. Collectively, they invested tens of millions of dollars into the company, the criminal complaint says.
Many of those investments were made in the last five years and involved wire transfers from Southeast Michigan to to QYU Holdings bank accounts in other states, officials said.
Ponzi scheme
Investigators said their initial findings suggested QYU Holdings was running a Ponzi scheme.
Bank records revealed newer deposits from investors were the primary source of payments made to other investors.
There were no obvious deposits or withdrawals from trading accounts, according to authorities.
Officials found significant fund transfers to people affiliated with QYU Holdings, including millions of dollars going to Robinson.
One of those transfers sent $800,000 to Robinson so he could buy property in the United Arab Emirates, court records show.
Robinson interview
Robinson spoke to law enforcement on June 20 and admitted that the claims made to investors were false, according to officials.
He said a small amount of investor money was traded in the global foreign currency exchange market, but not nearly their full investments.
Robinson created fake FOREX trading data and provided false account statements to investors, officials said.
He said he caused investors to invest $100 million with QYU Holdings -- including a high concentration of people from the Detroit area.
Other investors were from Canada, elsewhere in the United States, and several other countries, the criminal complaint says.
“Robinson admitted that the vast majority of the $100 million that was raised from QYU investors was not used for trading activity, even though the investors had been told that their money would be used for trading,” the complaint reads. “Instead, investor funds were used to pay distributions to other investors, pay QYU’s business expenses, compensate QYU’s client managers and employees, and fund Robinson’s lifestyle.”
Officials said Robinson’s interview confirmed that QYU Holdings was simply a “massive Ponzi scheme.”
Charge
Robinson was charged in the criminal complaint with committing wire fraud.
He appeared in federal court Tuesday in Detroit.
“The complaint alleges a brazen investment fraud that victimized investors around the world,” U.S. Attorney Dawn Ison said.
“This defendant allegedly orchestrated a large-scale, multimillion dollar Ponzi scheme with victims across the globe,” said James Tarasca, special agent in charge of the FBI’s Detroit field office. “Investment fraud can be crippling for its victims, and the FBI is committed to identifying and working with anyone impacted by this scheme.”
Robinson faces up to 20 years in prison, if convicted.
Authorities have identified several QYU Holdings investors. Anyone who was victimized by this Ponzi scheme can reach the FBI by clicking here.