Archive for September, 2014

Immigration Attorneys Charged with Defrauding EB-5 Investors

Posted on September 23rd, 2014 by Brian Garcia

 

In yet another cautionary tale, on September 3, 2014, the Securities and Exchange Commission charged Los Angeles attorney Justin Moongyu Lee, his wife Rebecca Taewon Lee, his law firm partner Thomas Edward Kent and five companies controlled by Mr. Lee, with conducting an investment scheme to defraud EB-5 investors.  The U.S. Attorney’s Office for the Central District of California also filed criminal charges against Mr. Lee.

The SEC alleges that Mr. Lee and Mr. Kent operated a regional center in Kansas that was used to raise $11.5 million in EB-5 funds for the construction of an ethanol plant that was never built and was no longer a viable project by mid-2008.  Despite this, the Lees and Mr. Kent continued to promote the project and distributed materials to EB-5 investors falsely representing that construction was ongoing and the plant would be in operation by November 2011.  The group also submitted false documents to USCIS to conceal the failure of the project.

According to the SEC complaint, the EB-5 funds were misappropriated for other uses.  It is alleged that Mr. Lee withdrew funds from the EB-5 investor escrow accounts without their knowledge and misused several million dollars.    The SEC press release can be read here.

This matter illustrates the importance of EB-5 investor due diligence prior to making an investment decision.  It also demonstrates the inherent conflicts of interest in regional center owned projects.  It is no surprise that greater scrutiny is being given to the EB-5 program by the SEC and other governmental agencies.

 

Immigration Reform Delayed

Posted on September 9th, 2014 by Brian Garcia

 

After we reported in late-August that action on immigration reform by President Obama was imminent, the White House announced that it will delay a decision until after the mid-term elections in November.   In June of this year, the President stated that he was prepared to act unilaterally via an Executive Order by the end of the summer if Congress refused to address immigration reform.  Under heavy pressure from Republicans and Democrats alike, the President delayed his decision.

The President announced his decision to delay action personally during an appearance on Meet the Press this past Sunday.  The President stated that he preferred to enter into a dialogue with the Nation on the need for immigration reform and the actions he is determined to take.  The President also stated that his decision was not related to the concerns that a conservative uproar could impact Democrats in the upcoming mid-term elections.

Whatever the reason, the President’s decision disappointed immigration advocates who vowed to continue pressuring the White House for action.