Wuo: ‘I Feel … Used’

Arcadia Councilman Disputes Company’s Marketing Material That Prominently Features Him

John Wuo denies knowing anything about GemCoin but appears in lots of photos on the web clearly stating otherwise. – Facebook

By Joe Taglieri

A company with ties to an Arcadia city councilman recently launched a digital currency that displays a wide range of Internet marketing material containing what the official claims is his falsely attributed endorsement of the financial investment product.

Council Member John Wuo’s image is highly visible on multiple websites in a wide range of languages that urge consumers worldwide to invest in Gemcoin, a digital or “cryptocurrency” that has emerged amid the trend that began with Bitcoin’s introduction in 2009.

Gemcoin’s numerous websites also contain endorsements of the investment product that are attributed to Wuo, who is prominently billed as the mayor of Arcadia. Several Gemcoin webpages include hyperlinks to his biography on the city’s website.

“The Mayor of Arcadia, John Wuo, confirmed the positive influence of Gem Coin on international virtual currency and the stability of the value of the ‘Gem Coin,'” according to several Gemcoin websites and a statement recounting a press conference last September in which Gemcoin founder Steve Chen unveiled the digital currency to the global investment market.

Wuo was first elected to the council in 2002 and completed his most recent stint as mayor in April.

In another Gemcoin marketing event, this time in March when the digital currency’s Arcadia-based parent company hosted investors from Singapore, a Gemcoin brochure posted online summarized the then-mayor’s remarks to the Singaporean group: “We help resident[s] to solve problems. USA is like other countries, with relationship it is easier to get things through. I can help you.”

Wuo, who has been in China for the last two weeks, denied making those flattering remarks about Gemcoin and said he intends to demand that the cryptocurrency’s marketing department excise his image and statements from the numerous promotional websites.

“When I return I will talk to Steve Chen and ask him to remove references to me in Gemcoin marketing material,” Wuo said in a phone interview.

“They used me to promote their company, and I feel like I have been used,” Wuo said, adding that he has no financial interest in and hasn’t received any compensation from the companies connected to Gemcoin, nor is he a Gemcoin investor.

“I don’t know anything about Gemcoin,” said Wuo, though he acknowledged his presence at the Singaporean event and other Gemcoin promotional gatherings over the last several months.

Gemcoin is the creation of Arcadia-based companies USFIA Inc., which stands for US Fine Investment Arts, and its parent Alliance Financial Group, or AFG.

Both companies are connected to the US-China Consultation Association, which like AFG and USFIA is located in a posh office complex at 135 E. Live Oak Ave.

Wuo and Chen are described as UCCA board members on the organization’s website and throughout Gemcoin’s plethora of online promotional copy. Solomon Yang is listed as UCCA chairman.

Wuo confirmed his UCCA affiliation and that he has had business relationships with Chen and Yang.

The council member said he has known Chen, who is the CEO of USFIA and AFG, for two years and has worked with Chen as a real estate consultant.

Gemcoin’s Logo

Wuo said he has known Yang for seven years and confirmed the two worked together at Wuo’s now defunct Golden Apple Group International Inc., an Arcadia-based real estate brokerage. An online business profile describes Yang, an Arcadia stakeholder, as the chairman of Golden Apple and notes his extensive experience with international securities and real estate investing.

In addition to glowing endorsements attributed to Wuo, Gemcoin marketing material also contains quite a few bold claims of sizable profits and investment stability.

Some notable examples include the claim that Gemcoin is backed by AFG’s worldwide assets totaling $15 billion or $50 billion, depending on which Gemcoin website one happens to be viewing, as well as claims of having 2,000 employees in 18 countries and “20 million active members and more than 3,000 Financial Centers” in North America, South America, Europe, Asia and Australia.

“The GemCoin … is positioning itself to become recognized by all as ‘the reference digital currency,'” states a promotional webpage. “Which will DEFINITELY open it’s [sic] way for even more explosive growth than the BitCoin!”

Another website inquires: “Why is the Gemcoin’s future looking so rosy? Because this is a currency based on concrete reality! USFIA and sister company AFG have backed the Gemcoin with real assets, in the form of their gem mines across the world.”

And another site extols, “[Gemcoin’s] value will never depreciate because it is back[ed] by Precious Rare Gemstones.”

While an amber mine in the Dominican Republic of which USFIA claims ownership is most prominently held to be the key real asset serving as Gemcoin’s fiscal backbone, the company also boasts of owning diamond and emerald mines in addition to interests in real estate, an auction house, a telecommunications company, an aeronautical supplies company and a biotech firm.

USFIA sells Gemcoin investment “packs” starting at $1,000, according to a promotional website. Its investment value “increases $0.0001” when USFIA nets $80,000 from amber sales.

On Tuesday an employee who said he worked in the Gemcoin marketing department deferred public comment to Chen and USFIA executive Leonard Johnson, both of whom the employee said were out of the country. As of press time neither responded to requests for an interview via phone or email and documents to support the marketing claims.

Tom Dresslar, a spokesman for the California Department of Business Oversight which regulates the financial services industry, took issue with Gemcoin’s assertion that legislation passed last year approved the virtual currency for commercial trade in the state.

“It’s never even mentioned in legislative discussion of the bill,” he said. “It mentions BerkShares, Starbucks Stars, Amazon Coins, Linden Dollars and Bitcoin. It doesn’t mention Gemcoin, ever.”

As state regulators continue developing a regulatory plan for digital currencies, the no. 1 priority “has to be consumer protection,” Dresslar said, emphasizing the need to crack down on unfair business practices and false or misleading advertising while enforcing proper public disclosure practices.

“There’s no disclosure about risk,” he said after checking out Gemcoin’s marketing content. “It’s all guaranteeing fabulous profits.”

Dresslar also posited that a company claiming multibillion-dollar asset status “wouldn’t have websites with so many typos and grammatical errors.”

Arcadia City Manager Dominic Lazzaretto said city officials were “not familiar with Gemcoin or any involvement Council Member Wuo has with it” prior to Arcadia Weekly’s inquiry.

Lazzaretto said he referred the information about Wuo’s presence in Gemcoin marketing material to City Attorney Stephen Deitsch “to make sure no laws are violated.”

Hana Callaghan, director of the government ethics program at Santa Clara University, observed that “it is unusual for politicians to be seen as endorsing one business over another. … A public official has a duty of fairness and impartiality and cannot be seen favoring one group over another.

“It would be particularly disturbing and an ethical violation if a public official is endorsing a product in his or her official capacity to personally benefit financially,” Callaghan continued. “That would be a breach of the official’s duty of loyalty and in some instances might be a violation of California law.”

John Wuo. – File Photo by Terry Miller

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