New Jersey authorities have indicted the chief executive of a Mercer County technology firm on charges tied to an alleged AI investment scheme that raised more than $1 million from investors.
According to Acting Attorney General Jennifer Davenport, a state grand jury charged Xiao Hu, also known as Mark Hu, 55, formerly of Princeton and now residing in Orlando, 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.
Prosecutors allege that from August 2019 through November 2023, Hu duped five victims into investing approximately $400,000 in Skyline Technologies USA LLC, claiming that the company had developed and was using an AI trading product that would guarantee annual returns of 10% to 22%.
He is also accused of persuading another investor, identified as H.M., to invest approximately $600,000 in Skyline itself by misrepresenting the company’s development and use of certain technology products and how the funds would be deployed.
Authorities claim Skyline had not developed or deployed the AI trading program or other technology products described to investors. Instead, most of the funds were allegedly used to pay purported returns to earlier investors in a manner consistent with a Ponzi scheme or used for Hu’s personal expenses, including payments toward a new home, luxury vehicles, private school tuition, a mortgage and personal credit card bills.
Acting Attorney General Davenport says the alleged misconduct centered on exploiting investor enthusiasm for AI.
“The kind of corporate fraud alleged in this case exploits people who are trying to invest in our economy. The defendant allegedly used the allure of AI technology to defraud investors of more than $1 million. We will continue to prosecute those who use their corporate positions to cheat others.”
If convicted, Hu could spend up to a decade behind bars.
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