Last week, Connecticut’s Banking Department gave the owners of the Putnam Science Academy (PSA), a private high school in Connecticut, 60 days to pay $5 million to two investors they are accused of defrauding. Last November, alleged victims and former PSA employees told Inside Investigator that Tieqiang Ding and Julia Fang, the husband-wife duo who co-own PSA, are guilty of defrauding investors and embezzling school funds to the tune of millions of dollars.
“As a result of the information obtained during the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the [Connecticut Uniform Securities] Act,” reads the Banking Department’s order. “The Division’s Investigation found that Respondents engaged in an affinity fraud by preying on Chinese nationals residing in China, Chinese nationals living in the United States, and Chinese Americans, and convincing them to invest in the Putnam School.”
In addition to the orders for restitution, the Banking Department also ordered Ding and Fang to cease and desist from any further fraudulent activities, and notified the two of Banking Commissioner Jorge Perez’s intent to fine them up to $400,000 for their alleged violations of the state’s Uniform Securities Act.
Ding and Fang purchased the private Putnam-based high school in 2015 for $2.9 million, alongside another investor who remains unnamed in the Banking Deparment’s order. Inside Investigator spoke to this investor last year on the condition of anonymity, who alleged Ding of defrauding her out of $4.5 million, which she said was used to purchase and subsequently invest in the school. The Banking Department notes her as being a “non-respondent” to the investigation completed by the Department’s Securities and Business Investments Division (SBID).
The order summarizes the stories of three unnamed investors who provided Ding and Fang with a total of $5.4 million in investments, and who were contacted by the SBID for their investigation. The first investor was found to have lent the pair $200,000 in December 2016 and was not made whole until early this year. The second “investor”, actually noted as being a family of three investors, paid Ding and Fang a total of $400,000, and are still owed $113,000.
Via matching court records with the figures provided by the SBID in the Banking Department’s orders, Inside Investigator has identified the third investor as being Raise Crest Education Inc., a Massachusetts-based private education company. Inside Investigator reached out to Raise Crest last year, but the company’s attorney declined to comment.
Raise Crest lent the two a total of $4.8 million via promissory notes issued in late 2019 and early 2020, but was never reimbursed, despite the company having reached a settlement with Ding and Fang on June 4, 2024, in which the two agreed to make Raise Crest whole. The state’s Banking Commissioner, Jorge Perez, has demanded Ding and Fang pay both Raise Crest, and the other group of investors, full restitution within 60 days. Ding and Fang owe the two $4,913,000 in total.
The SBID’s findings included in the orders mirror many of the claims made by several alleged victims who spoke with Inside Investigator last year. The alleged victims accused Ding and Fang of misrepresenting both their professional acumen and their school’s financial value to procure investment, and of relentlessly pressuring reticent investors into giving them money. After investment, Ding and Fang were accused of dodging investors’ communications, threatening those who persisted in requesting reimbursement and/or providing them with excuses for why they could not repay, and failing to reimburse them in a timely fashion, if at all.
“Ding and Fang lured investors to invest in the Putnam School by creating a narrative, much of it false, about their experience and qualifications to manage a high school and its finances,” read the order’s Statement of Facts. “In most cases, once Ding and Fang received the investment money, they would become unresponsive to communications from the investor, and when a promissory note became due, Ding and Fang would default on the note and make excuses as to why the money could not be repaid.”
Several alleged victims told Inside Investigator they were originally introduced to Ding via WeChat, a Chinese-communications app similar to WhatsApp. Per the Banking Department’s investigation, Ding and Fang joined the WeChat group in question, which had about 311 members, around 2014, and began soliciting investment in PSA around November 2016.
“On November 18, 2016, Ding posted a message in Chinese in the WeChat Group,” read the order. “Translated into English, the message stated: ‘Is anyone interested in investing and immigrating to the United States? My school has a spot. $1 million, shares, dividends, and management participation are also welcome.'”
Inside Investigator also spoke to several former PSA employees last year, who accused Ding and Fang of frequently ignoring overdue bills and taxes, while looting the school’s accounts for their own personal use, ultimately culminating in the school’s bank account being frozen by the IRS. Employees told Inside Investigator that Ding would routinely transfer money from PSA’s account to his own personal account, and that they would have to rush to pay off the school’s payroll, utilities, insurance and other expenses prior to these transfers.
Many of these same allegations were also affirmed by the SBID’s investigation, which said the two failed to disclose to investors that, “investor money would be used by Ding and Fang (and in some cases their children) for personal expenses, including but not limited to, personal mortgage payments, tuition for the children’s middle and high schools, clothing, and travel; and… that investor money would be commingled in the same bank account with Ding and Fang’s personal money and other operating income for the Putnam School.”
Ultimately, the Banking Department found Ding and Fang to “have each committed at least one violation” of Section 36b-16 and Section 36b-4(a) of the state’s Uniform Securities Act, by offering/selling unregistered securities and committing fraud via securities. Violations of the act can be punishable by up to $100,000 in fines per violation, meaning that Ding and Fang could have to pay an additional $400,000 to the state in fines.
“Notice is hereby given to Respondents that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation upon each Respondent,” read the order.
Per the orders, Ding and Fang have until Oct. 1 to request a hearing on their violations. If they request a hearing, it will be held on November 12, at 10 a.m. at the Banking Department’s offices in Hartford.
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