Phil Ming Xu kept US regulatory inquiries into his WCM777 Ponzi scheme quiet until Massachusetts publicly announced its investigation. Xu then claimed to be "suspending all US operations," yet he continued to accept investments and pay daily returns to American affiliate investors.
California then investigated WCM777. Xu again remained silent about this probe. Instead, he announced he would step into the background and rename WCM777 to "Kingdom777." James Tenorio was named as Xu's replacement.
Xu also promised Kingdom777 would eventually go public and "register its stock with the SEC." In a Kingdom777 website announcement in early January, Xu blamed WCM777 affiliates for his regulatory troubles.
This "blame the affiliates" announcement came the day before California formally issued its cease and desist order against Xu and WCM777. Following California's action on January 8th, Colorado issued its own notice. Both Louisiana and New Hampshire issued WCM777 investor alerts.
Despite the clear risk of further regulatory action, James Tenorio, Xu's successor, published his first member announcement on the Kingdom777 website on January 26th.
He addressed members, stating, "It has been a busy few days for me. I have been in numerous meetings and will be in countless more as I attempt to gain a full understanding of all the details of the program we acquired from WCM 777."
Tenorio continued, "Our first order of business is to ensure that we work within the guidelines of the law. In doing so, I will be officially suspending all U.S. based transactions throughout our Kingdom 777 system. I am sure with legal council that we will be able to restructure our company to be in direct compliance with all regulatory guidelines here in the US."
He added, "Our Kingdom 777 name and brand is something that I will protect and not allow people to create a negative image of our community. We will be moving towards removing those who use our brand and logo without authorization directly from Kingdom 777."
It remains unclear whether Tenorio intends to protect Kingdom777 from Xu, the scheme's creator, or from the US regulators who have issued notices against it. US ROI payments to Kingdom777 affiliates have stopped.
California investigators, after reviewing Kingdom777's financials, claimed WCM777 had taken in $20 million USD from investors. The amount from US investors and where Xu and Tenorio transferred these funds remain unanswered questions for those affected.
The method Tenorio and his lawyers plan to modify Kingdom777's business model for legal US operation is also unknown. The company continues to accept investment funds and pay daily returns to non-US affiliate investors.