Archive

April 11, 2017

Argentine information technology and consulting firm Sistemas Globales S.A. agreed to pay $1 million to settle charges that it and its corporate affiliates, including U.S. affiliate Globant LLC, violated the False Claims Act and the Program Fraud Civil Remedies Act relating to Globant’s use of B-1 visas for certain of its foreign national employees. DOJ (NDTX)

January 17, 2017

The SEC announced fraud charges against Thomas M. Henderson, an Oakland, California-based businessman accused of misusing money he raised from investors through the EB-5 immigrant investor program.  The SEC alleges that Henderson and his company San Francisco Regional Center LLC falsely claimed to investors that their $500,000 investments would help create at least 10 jobs within several distinct EB-5 related businesses Henderson created, including a nursing facility, call centers, and a dairy operation.  But according to the SEC’s complaint, Henderson jeopardized investors’ residency prospects and combined the $100 million he raised from investors into a general fund from which he allegedly misused at least $9.6 million to purchase his home and personal items and improperly fund several personal business projects.  Henderson also allegedly improperly used $7.6 million of investor money to pay overseas marketing agents, and shuffled millions of dollars along the EB-5 business to obscure his fraudulent scheme.  SEC

December 28, 2016

Florida-based businessman Jason Adam Ogden has agreed to pay more than $1.2 million to settle charges that he misused investor funds intended to create U.S. jobs through the EB-5 Immigrant Investor Program.  The SEC alleged that Ogden, the CEO of a pair of smoothie and frozen yogurt franchises called Juiceblendz and Yoblendz, formed AJN Investments LLC to conduct an investment offering in conjunction with the EB-5 program which provides foreign investors a path to permanent residency when their investments create at least 10 jobs for American workers.  Investors were allegedly told that their money would help build and operate Juiceblendz and Yoblendz stores in strip malls and create a sufficient amount of jobs for them to qualify for an EB-5 visa and ultimately a green card.  But, according to the SEC’s complaint, Ogden changed his business model midstream without updating the offering materials, and focused on developing kiosks in sports arenas and university campuses rather than following through the construction of full-size stores.  Not only did this result in smaller-than-promised returns for investors, it also jeopardized their EB-5 program status because kiosks don’t stimulate the same job creation as full-size stores and construction projects.  The SEC further alleged that Ogden improperly siphoned off more than $1 million in investor funds for his personal use, making undisclosed cash transfers to his bank account.  SEC

December 27, 2016

The SEC charged California-based attorney Emilio Francisco with defrauding investors seeking to participate in the EB-5 immigrant investor program.  The SEC alleges that Francisco raised $72 million from investors in China, solicited through his marketing firm PDC Capital, to invest in EB-5 projects that included opening Caffe Primo restaurants, developing assisted living facilities, and renovating a production facility for environmentally friendly agriculture and cleaning products.  According to the SEC’s complaint, Francisco and PDC Capital diverted investor funds from one project to another and outright stole at least $9.6 million that was used to finance Francisco’s own business and luxury lifestyle.  SEC

June 2, 2016

The SEC announced fraud charges and an asset freeze against Charles C. Liu, his wife Xin “Lisa” Wang, and their companies Pacific Proton Therapy Regional Center, Pacific Proton EB-5 Fund, and Beverly Proton Center LLC.  The SEC’s complaint alleges that Liu and Wang raised $27 million for a proton therapy cancer treatment center in Southern California from 50 investors in China through the EB-5 immigrant investor program.  They touted in promotional materials that the project would create more than 4,500 new jobs and have a substantial impact on the local economy while giving foreign investors an opportunity for future U.S. residency.  But presently there is no construction at the proposed site after more than 18 months of collecting investments.  Meanwhile, Liu has transferred $11 million in investor funds to three firms in China and diverted another $7 million to his and his wife’s personal accounts.  SEC

December 7, 2015

The SEC announced a series of enforcement actions against lawyers across the country charged with offering EB-5 investments while not registered to act as brokers.  The SEC settled administrative proceedings against at least seven immigration law firms and/or attorneys, who agreed to cease and desist from acting as unregistered brokers, and collectively will pay over $700,000 in disgorgement, penalties, and prejudgment interest.  The SEC also filed a complaint in federal district court in Los Angeles alleging that immigration attorney Hui Feng and the Law Office of Feng & Associates not only acted as unregistered brokers by selling EB-5 investments to more than 100 investors, but also defrauded their clients by failing to disclose their receipt of commissions on the investments in breach of their fiduciary and legal duties. SEC

November 19, 2015

The SEC obtained a court order freezing the assets of Lin Zhong and her company EB5 Asset Manager LLC.  The SEC alleges that Zhong and EB5 raised at least $8.5 million for use in job-creating real estate development projects, but they diverted nearly $1 million to purchase a boat, a BMW, and a Mercedes among other improper personal uses of investor funds.  SEC

August 25, 2015

The SEC obtained court authorization to freeze the assets of Mr. Lobsang Fargey, a Bellevue, Washington man accused of defrauding Chinese investors seeking U.S. residency through the EB-5 program.  The SEC alleged that Dargey and his “Path America” companies raised at least $125 million for two Washington-based real estate projects, but Dargey diverted $14 million for unrelated real estate projects and $3 million for personal use.  The court’s order also restrains Dargey from soliciting additional investors and requires him to repatriate funds transferred to overseas bank accounts.  SEC

July 6, 2015

The SEC charged Bay Area oil and gas company, Luca International Group, and its CEO, Bingqing Yang, with running a $68 million Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, including some solicited as part of the EB-5 Immigrant Investor Program.  SEC

June 23, 2015

The SEC charged Ireeco LLC and Ireeco Limited with illegally brokering more than $79 million of investments by foreigners seeking U.S. residency through the EB-5 Immigrant Investor Program.  The companies are charged with acting as unregistered brokers for more than 150 EB-5 investors.  SEC