SAN JOSE -- A Texas businessman pleaded guilty Thursday to defrauding millions from investors of his West Texas cotton businesses, including a Palo Alto resident, according to the Department of Justice.
In San Jose federal court, Keven Chen Chieh Yang, 42, admitted to making false, material statements causing several people to invest more than $5 million in "cotton recycling businesses" located in the Lubbock, Texas, area, according to the department.
One of the investors lives in Palo Alto, according to federal documents. He and his father, who lives in China, lost $4.2 million in the scam, according to the complaint, which does not identify either of them.
Other investors lived in North Carolina and China, among other places.
Prosecutors say Yang promised to invest the money in the businesses, but instead spent millions at casinos and diverted funds to offshore accounts.
Yang, 42, a citizen of Taiwan, Republic of China, and a former resident of Rowland Heights, was indicted by a federal grand jury in July, 2011. He was originally charged with seven counts of wire fraud; under a plea agreement, Yang pleaded guilty to three counts of wire fraud.
He is expected to be sentenced on Nov. 12.
Contact Mark Gomez at 408-920-5869. Follow him on Twitter @MarkMgomez.