A former Ameriprise financial advisor was sentenced to more than 11 years in federal prison Friday for ripping off 20 clients for about $8.1 million.
Li Lin Hsu, 42, of Diamond Bar, Calif., was sentenced to 136 months in federal prison and ordered to pay $5.2 million in restitution after pleading guilty last year to wire fraud.
Hsu roped in her victims with promises to invest their money safely in a scam that ran between February 2014 through May 2018, according to federal prosecutors, who said she lulled her clients, who are of Chinese descent, into a false sense of security by speaking to them in their native tongue. Some of her victims were her relatives, prosecutors said.
But instead of investing client funds, Hsu pocketed the money and spent it on the purchase of a $1 million condominium in a Los Angeles suburb, a luxury home in Irvine, a Tesla automobile, a Paris vacation and other personal goods and expenses, prosecutors said.
Later, the scam evolved into a Ponzi scheme where Hsu used money from some investors to make payments to other clients, prosecutors said.
Ameriprise fired Hsu in 2015 when her bosses learned of the scams, prosecutors said. She was registered for five months in 2015 with a small California firm until she was barred by the Financial Industry Regulatory Authority Inc. in 2016.
At that point, Hsu preyed on unsuspecting investors as an unregistered advisor until she was arrested by FBI agents in April 2018 on multiple counts of wire fraud, money laundering and obstruction of justice, which together carry a 35-year sentence.
Hsu worked as a broker and subsequently as an investment advisor with Ameriprise for a total of nine years, until the firm fired her in 2015. Ameriprise said Hsu violated company policies “related to maintaining a beneficiary relationship with a client, complaint handling, commingling funds, conducting business with a foreign client and resusing previously submitted client forms,” according to Hsu’s BrokerCheck report.
The former advisor has paid back some of the stolen money through the liquidation of her assets, her attorney, Kate Corrigan, told reporters after Hsu’s sentencing.
“She’s made a commitment to herself and to the victims in the case to right the wrongs she has committed,” Corrigan said. “She has recognized and taken accountability for her actions and she has great regret of what she’s done to the victims in this case.”
According to a 2017 customer complaint on BrokerCheck, Hsu was accused of advising them to purchase a “failing or unprofitable business for her personal gain” and “illegally borrowed money from them.” She settled their $1 million damage request for $100,000, but subsequently was found by Finra to have failed to pay arbitration awards.