Former Princeton Resident Accused of Defrauding Investors Out of $2.5 Million, State Says

Lawsuit alleges entrepreneur targeted Asian American investors, misused funds for Florida home, vacations, and private school tuition

The New Jersey Bureau of Securities has filed a civil lawsuit against a former Princeton resident accused of defrauding investors out of at least $2.5 million through what state officials describe as a fraudulent investment scheme tied to technology and artificial intelligence ventures.

Attorney General Jennifer Davenport announced Thursday that the bureau sued Xiao “Mark” Hu and two companies he controlled — Skyline Technology USA LLC and Thunderbirds.ME, Inc. — in Mercer County Superior Court. The lawsuit alleges Hu sold unregistered securities to at least 15 investors, including at least nine New Jersey residents, while making false promises about investment returns and the nature of the businesses.

According to the complaint, Hu raised money through stock offerings, funding agreements, sponsorship arrangements, and other investment contracts tied to technology and AI development projects. State officials allege the investments were fraudulent and that Hu commingled investor funds with his personal finances.

The lawsuit alleges Hu diverted at least $280,000 in investor money for personal expenses, including the purchase of a home in Florida, a tropical vacation, and private school and college tuition for his children.

“New Jersey families work hard for their money, and protecting residents from fraud is essential to keep our state affordable,” Davenport said in a statement. “Our lawsuit alleges that Mark Hu exploited investors’ trust, swindling them and diverted their money for his own personal gain instead of legitimate business purposes.”

State officials allege Hu primarily targeted Asian American investors in the Princeton area through the social media platform WeChat and by soliciting friends, colleagues, and attendees at seminars held at the Princeton Public Library. The complaint also alleges Hu falsely claimed to hold a doctorate in computer science from Columbia University to enhance his credibility with potential investors.

According to the lawsuit, Hu promised investors annual returns ranging from 10% to 22% and bestowed titles such as “Managing Partner,” “Managing Director,” “Co-Founder,” and “Chief Operation Officer” on investors regardless of their actual roles in the businesses.

The seven-count complaint alleges violations of the New Jersey Uniform Securities Law, including operating a scheme to defraud investors, selling unregistered securities, and making false or misleading statements while omitting material information.

The Bureau of Securities is seeking a court order permanently barring Hu and his companies from offering or selling securities in New Jersey. The agency is also seeking restitution for investors, civil penalties, and disgorgement of profits allegedly obtained through the scheme. Hu’s wife, Jennifer Rong, and Think Net, Inc. are named as nominal defendants in connection with assets the state seeks to recover.

The civil lawsuit follows a criminal case already pending against Hu. In February, a state grand jury indicted him on charges including securities fraud, theft by deception, money laundering, and misconduct by a corporate official. The criminal case is being prosecuted by the New Jersey Division of Criminal Justice.