This summer the SEC has been aggressively pursuing claims against developers and others involved in the EB-5 Immigrant Investor Program, which permits foreign citizens to apply for U.S. residency if they make a qualified investment in a specified project that creates or preserves at least 10 jobs for U.S. workers. The latest example is a securities fraud suit by the SEC against Lobsang Dargey, a Bellevue, Washington-based real estate developer, who also happens to be a brother-in-law of tennis star Andre Agassi. According to the SEC, Dargey and his companies obtained investments from 250 Chinese investors under the auspices of the EB-5 program, misled those investors about their prospects for obtaining permanent residency, and diverted millions of dollars from their investments for unrelated projects and Dargey's personal use, including a home purchase and cash withdrawals at casinos. Adam Sisitsky and Doug Hauer analyze the case in depth in this post for our sister blog, EB-5 Financing Matters.
The Dargey case is just the latest in a series of recent actions brought by the SEC involving the EB-5 Program. Other recent examples include SEC v. Luca International Group, LLC , which charged the defendants with defrauding Chinese investors in their oil and gas ventures under the EB-5 program, and In re Ireeco, where the SEC charged two companies with securities laws violations for failing to register as brokers in connection with advising foreign citizens about potential EB-5 investments. To learn more about these cases check out the posts on EB-5 Financing Matters here and here.