Lin Miao, who bankrolled L.A. tech incubator Be Great Partners with money federal regulators claim was the product of a long-running scam, agreed to pay $150 million to settle the government’s accusations.
But when it became clear that the figure was beyond his ability to pay, the Federal Trade Commission backed off, agreeing to take some $10 million in assets instead. Now it appears the government might not even get that much.
Thomas W. McNamara, a court-appointed receiver, has so far been able to recover $8 million from assets once belonging to Miao, former business partner Andrew Bachman and their companies.
The government alleged Miao and others defrauded cellphone customers out of tens of millions of dollars through Boston marketing company Tatto Inc. in a scheme that charged $10 monthly fees for unauthorized subscription text message services, such as celebrity news alerts or horoscopes.
Some of the proceeds from the alleged scheme found their way overseas and some were used to start Be Great, which was located in a tower on Wilshire Boulevard on the Miracle Mile near the Los Angeles County Museum of Art.
Be Great has since closed. The roughly $2 million McNamara is trying to recover is believed to be held in a $1 million Hong Kong brokerage account and a Sri Lankan bank account.
The latter account belongs to Michael Pearse, who has also been accused of participating in the alleged scheme, and Jon Bloomberg, who managed some of Miao’s real estate investments from his L.A. office, according to court papers.
In court filings, McNamara said that earlier this year he was close to a deal with Pearse and Bloomberg to recover the money. That deal disappeared, however, when the FBI arrested Miao in May at Los Angeles International Airport. Miao has been charged with conspiracy to commit wire fraud and mail fraud and conspiracy to commit money laundering. If convicted, Miao, who was released on a $447,000 bond, could face up to 20 years in prison.
Pearse, who has returned to his native Australia, was charged with conspiracy to commit wire fraud and mail fraud at the same time as Miao, putting the kibosh on McNamara’s efforts to get money out of him, said Daniel Benjamin, the receiver’s lawyer in San Diego.
“Once he was facing the threat of criminal action, he pretty much wanted to stay in Australia,” Benjamin said. “It’s always more difficult when people are overseas if you want to collect money from them.”
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