The Securities and Exchange Commission ("SEC")has accused a Bellevue, Washington man of defrauding 250 Chinese investors. In its complaint , the SEC alleges that Lobsang Dargey ("Dargey"), through his "Path America" companies, was able to raise over $125 million from investors seeking United States residency through the EB-5 Immigrant Investor Pilot Program. Under the EB-5 program, foreign citizens may qualify for residency for making qualified investments of at least $500,000 in a specified project that creates or preserves at least 10 jobs for U.S. workers.
As part of his scheme, Dargey told the investors and U.S. Citizenship and Immigration Services ("USCIS") they would be investing in a Seattle Skyscraper and other real estate projects in Everett, Washington. Instead, $14 million was diverted to unrelated real estate projects and $3 million was used to purchase a home and make cash withdrawals at various casinos. According to Jina L. Choi, Director of the SEC's San Francisco Regional Office "Dargey promised investors their money would be used to develop specific real estate projects approved under the EB-5 program, but he misused millions of dollars to enrich himself and jeopardized investors' prospects for U.S. residency." As a means to protect current and future investors, the SEC has frozen Dargey's assets as he recently filed new materials with USCIS to raise an additional $95 million through the EB-5 Program. Dargey also transferred $3 million to a foreign bank account which the SEC is requiring he repatriate. A restraining order also has been issued against Dargey and his companies from soliciting additional investors. Jacko Law Group, PC can assist your firm with issues pertaining to its EB-5 business. JLG can provide counsel pertaining to consulting arrangements and requisite disclosures for EB-5 offerings to your clients and regulatory considerations pertaining thereto. For more information on this and other related subjects, please contact us at [email protected]or (619) 298-2880.