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The defense attorney for an Alamo man accused of a $39 million ponzi scheme involving Warriors tickets and luxury suites at the Chase Center is continuing to review evidence in the case this week as they seek to prepare a plea deal.
Derek Chu, 43, was scheduled to appear for a change of plea hearing at the U.S. District Court in San Francisco Friday before a judge granted a request to continue the hearing to September from Chu’s attorneys, who requested additional time to review the large amounts of evidence.
“Due to the complexity of calculating losses for all the potential victims and the considerable amount of discovery provided, Counsel for defendant requires additional time to complete a thorough and reliable loss assessment,” Chu’s attorney James Bustamante wrote in a stipulated order submitted Wednesday.
Chu’s arrest more than two years ago came following an extensive investigation that started with the San Francisco Police Department in 2019 and resulted in his arrest in 2023 on eight counts of wire fraud by federal authorities. He pleaded not guilty upon his arraignment in 2023.
In particular, Bustamante said he needed more time to review evidence that would enable him to calculate loss amounts for the victims, which he noted would impact sentencing guidelines.
“Given Defense’s limited resources and staff compared to the Government, more time is needed to complete individualized loss calculations,” Bustamante said.
Other reasons for the request, Bustamante said, are the complexity of the case, with more than 100 investors and 50 different bank accounts in Chu’s name identified during the investigation and 2.5 terabytes of information produced during the discovery process.
As it stands, Bustamante said that the two sides had made progress in formulating a plea agreement, and were currently working on a draft.
“All parties are doing their due diligence to obtain a resolution and are hopeful that the final resolution will be reached,” Bustamante said.
Chu allegedly bilked investors – some of whom allegedly liquidated their life insurance and retirement funds – of a total of $39 million between 2013 and 2020, when he operated buying and reselling tickets to games at the Oakland Arena, Chase Center, and the Cyrpto.com Arena in Los Angeles.
While he paid out $29 million back to investors, those funds allegedly didn’t come from business operations, but from new investors whose money Chu allegedly used to pay back earlier investors.
In addition to federal charges, Chu has received fallout from the alleged scheme in state court, with a Contra Costa Superior Court Judge ruling in 2022 that he was required to pay out more than $639,000 to an Alameda County couple who brought the case forward on allegations of fraud, breach of contract, financial elder abuse, and unjust enrichment.
Months after Chu’s arrest in 2023, a Concord man who has known Chu since childhood filed a breach of contract case that is also making its way through Contra Costa County Superior Court, with allegations that Chu failed to pay back money and misrepresented his venture SuiteLife Entities as a legitimate and lucrative one.
That case is set for a case management conference Aug. 1, ahead of the rescheduled change of plea hearing in the federal case scheduled for Sept. 12.
