Former Princeton resident Xiao Hu, also known as Mark Hu, is being sued by the New Jersey Bureau of Securities after he allegedly defrauded investors out of at least $2.5 million.
The civil lawsuit, which was filed in Mercer County Superior Court on June 6, stated that Hu offered and sold unregistered, fraudulent securities to at at least 15 investors through Skyline Technology USA LLC and Thunderbirds.ME, Inc., officials said.
The fraudulent securities included stock offerings, funding and sponsorship agreements that promised fixed returns, and related investment contracts tied to technology and AI development projects.
Hu allegedly promised investment returns of 10% to 22% on the investments.
The seven-count lawsuit seeks to bar Hu from ever offering, selling, issuing, or promoting securities in New Jersey and from engaging in the New Jersey securities business in any professional capacity.
It also asks the Court to assess civil monetary penalties and for Hu to make restitution to the victims, as well as to surrender all profits made from the fraudulent securities.
Hu allegedly commingled investor funds with money in his personal bank accounts and used at least $280,000 to pay for a new home in Florida, a tropical vacation, and tuition for his children’s private school and college.
“As we will show, Mark Hu deceived investors into believing they were participating in a legitimate opportunity to grow their money. In reality, the only person benefiting from these sham securities was Hu himself,” said Jeremy E. Hollander, the acting director of the Division of Consumer Affairs.
The New Jersey Bureau of Securities is within the Division of Consumer Affairs.
Financial fraudsters often target people with whom they share personal, professional or community connections to quickly build trust and to neutralize skepticism, said Keith Alt, the acting bureau chief for the New Jersey Bureau of Securities.
In Hu’s case, he allegedly targeted Asian American investors in the Princeton area using the social media platform WeChat, according to the lawsuit. He also solicited from friends and colleagues, including in-person seminars at the Princeton Public Library.
This is not the first time that Hu has been in trouble. He is facing criminal charges, as well.
Hu was indicted in February by a state Grand Jury on two counts each of securities fraud and money laundering, and one count each of theft by deception and misconduct by a corporate official.
Hu was the CEO of Skyline Technologies USA LLC, which was allegedly involved in developing and using artificial intelligence (AI) trading and other technology products.
In the criminal indictment, Hu has been accused of engaging in a Ponzi scheme that defrauded six investors of more than $1 million, according to the Office of the New Jersey Attorney General.
Between 2019 and 2023, Hu allegedly convinced five victims to invest about $400,000 in Skyline Technologies. He told them that it was developing and using an AI trading product that would generate annual guaranteed investment returns of 10% to 22%. A sixth investor put about $600,000 into the company.
However, the company had not developed, and was not using, AI trading programs or other technology that Hu allegedly claimed it had created.
Instead, he allegedly laundered some of the money to pay investors the purported returns on their original investments, which is typical of a Ponzi scheme.
In a Ponzi scheme, money is paid to existing investors with funds invested by newer investors. It is not paid to investors from actual profits.
