2 Taiwanese Arrested in Commodities Fraud Case

A Taiwanese immigrant who rented a room from an Orange County couple from Taiwan was arrested with a woman companion Thursday on charges that they bilked the couple out of $110,000 in a commodities fraud scheme.

Mike Huang, 35, a resident alien originally from Taiwan, and Donna Soong, 34, an illegal alien from Taiwan, were arrested on a criminal complaint issued Wednesday in U.S. District Court charging them with mail fraud.

Shirley and George Liao were recent immigrants from Taiwan when they first met Huang and agreed to rent him a room in their Santa Ana home in 1983, according to an FBI affidavit filed in court with the complaint.

Huang said he was a representative from the Santa Ana office of Archer-Heinhold Commodities and the California branch manager and vice president of Federal Commodities Services Inc., an investment firm.

Huang urged the Liaos to invest money in a FCSI fund that he said was headed by Soong in Chicago and made large profits by pooling funds and investing them in low-risk, government-insured commodities and other securities, the affidavit states.

Huang assured the couple that the fund was affiliated with the reputable Chicago firm of Heinhold Commodities Inc., the affidavit states.

The Liaos, who have since moved to Placentia, took his advice and invested $110,000 in the fund from January to May, 1984, the affidavit says.

They received monthly statements from Soong’s address in Chicago falsely reflecting steady profits, the affidavit states.

By September, 1984, the statement said they had accrued net profits of $25,564 on their $110,000 investment, according to the indictment.

But in November, 1984, the Liaos received a statement reporting “the total loss of their investment plus all accrued profits” and a letter from Soong advising them that the fund had suffered tremendous losses and had to fold, the affidavit says.

The Liaos were unable to locate Huang or Soong, the affidavit states.

Soong had opened the high-risk, uninsured commodity-futures account in Chicago with Heinhold Commodities in January, 1984, and was the only person authorized to trade on it, the affidavit says.

The account--composed of money invested by third parties, including the Liaos--produced “steady and substantial losses” from the start, the affidavit states.