Chisan Chong and Steve Linnenkamp, executives at a Denver, Colorado Tech Center company called Direction Labs, were arrested after swindling an investor out of $848,000. According to court documents, Chong claimed to have software that would “take all the guesswork” out of making trades on domestic and foreign exchanges. He further asserted that the software was “bulletproof” and that investors would “never lose.”
Chong had hired Linnenkamp to help him market the software as well as find investors who would provide funding for trading on the FOREX. In 2011, Linnenkamp approached David McCarthy about an investment opportunity with the company. According to McCarthy, neither Chong nor Linnenkamp ever mentioned risk associated with the investment but claimed that it would be a “no lose” scenario. McCarthy was asked to invest a million dollars but instead invested $500,000.
Months later, Linnenkamp contacted McCarthy asking for an additional immediate $300,000 investment that would be traded on the FOREX market. McCarthy was told that Chong would personally take the funds with him to England where he would make the trades himself. McCarthy was also told that his investment would yield $1 million, which it did not.
Allegedly, Chong transferred most of the money into his own account and used it to purchase personal items, such as a car. According to investigators, no evidence was found that suggested that the software even worked. Authorities believe that Linnenkamp knowingly misled McCarthy by entering false trading information on the Direction Labs website.
Chong has been charged with theft and numerous counts of securities fraud. Linnenkamp has been charged with securities fraud, computer crime, accessory to securities fraud, and accessory to theft.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.