The Securities and Exchange Commission (SEC) has announced charges and asset freezes against the operators and promoters of a worldwide pyramid scheme that falsely promises exponential, risk-free returns to investors in a venture that purportedly sells Internet-based children’s educational courses. The scheme has ensnared at least 400 investors in New York, California, and other areas with large Asian-American communities.  These promoters have raised more than $20 million from U.S. investors, and millions of dollars more from investors in Canada, Taiwan, Hong Kong, and other countries in Asia.

The scheme’s operators and promoters use Internet videos, promotional materials, and seminars to create the appearance of a legitimate enterprise while exploiting close connections among members of the Asian-American community. Bank records show that the bulk of the money raised has been paid out to accounts controlled by the scheme promoters and that there are no sources of revenue other than money received from new investors.