SAN JOSE (CBS SF) – A former Silicon Valley hedge fund operator has been convicted in federal court in San Jose of wire fraud in connection with a scheme that according to prosecutors bilked investors of millions of dollars.

Albert Ke-Jeng Hu, 50, was found guilty Wednesday by a jury in the court of U.S. District Ronald Whyte of seven counts of wire fraud in connection with fund transfers made in 2005 and 2007.

Hu, who formerly lived in Fremont and in Hong Kong, will be sentenced by Whyte on Sept. 10. He faces a possible maximum sentence of 20 years in prison on each count.

Hu has been in custody since he was extradited from Hong Kong in 2009.

U.S. Attorney Melinda Haag said Hu ran hedge funds based in Sunnyvale, San Francisco and Singapore between 2002 and 2008.

She said evidence at the three-week trial showed that Hu defrauded investors of millions of dollars by promising them returns of up to 20 to 30 percent per year while investing virtually none of the funds entrusted to him.

Haag said Hu spent some of the money on personal expenses and used some to repay prior investors. She said the trial evidence showed that Hu targeted prominent members of the Chinese-American business community in Silicon Valley as investors.

A related civil lawsuit filed against Hu by the U.S. Securities and Exchange Commission is pending in Whyte’s court and has been put on hold until the criminal case is completed.


(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)