Monday, September 25, 2023
Courthouse News Service
Monday, September 25, 2023 | Back issues
Courthouse News Service Courthouse News Service

Man Says Federal Visa Program Used in Scam

LOS ANGELES (CN) - An investment company used a federal visa program to defraud a Chinese citizen seeking U.S. residency of $525,000, the man claims in court.

Yiguang Chen sued USA Global Development Company, its president Thomas G. Wilkinson, CEO James Stout, and Director Grace Lin, and Washington company American Life Inc., in federal court Wednesday, Nov. 12.

"Using the lure of gaining a pathway to U.S. citizenship through the EB-5 Visa Program, the group [of defendants] targeted plaintiff in a scheme to sell securities interest in a limited partnership in order to finance and build a horse training and boarding facility, residential lots, and a resort spa and corporate retreat," the complaint states.

Chen says, "The group used false and misleading information to solicit plaintiff in the purported project to pay a $500,000 investment and a $25,000 'administrative fee' in order to defraud him and misappropriate his investment funds."

Created through the Immigration and Nationality Act, the EB-5 Visa program enables foreign nationals to obtain a green card by investing in U.S. business and job creation. Under the pilot program enacted in 1992, a prospective immigrant must invest at least $1 million in a "new commercial enterprise" that will create at least 10 full-time jobs for U.S. citizens or legal aliens, or at least $500,000 in a "targeted employment area," according to the complaint.

"The majority of EB-5 visas are administered through EBl-5 regional centers, which are entities that pool investments and are authorized to develop projects across a large swath of the United States' metropolitan regions and rural areas. The U.S. Citizenship and Immigration Services (USCIS) must approve the designation of a regional center for it to quality under the pilot program," the complaint states.

Chen says he applied for an EB-5 visa in early 2009 for himself and his family, and received "five to six prospectuses" from the defendants for investments that would qualify him for the pilot program.

One of the brochures was for a project called the Hacienda de Caballo, a 274-acre property slated to be developed into "a five-star, one thousand stall horse training and boarding facility" near the Cleveland National Forest in Riverside County, according to the complaint.

Chen says he chose the Hacienda de Caballo because it would create "direct" jobs, qualify him for the $500,000 investment option, and enable his daughter, whose twenty-first birthday was in September 2009, to join him on the visa.

Though the defendants warned investors that they could not guarantee green cards for everyone, they promised to return the $500,000 for anyone denied residency because the defendants did not complete the proper paperwork, according to the complaint.

Chen says he came from China to the United States to sign the agreement, which required him to pay a purchase price of $25,000 in addition to his $500,000 investment, and wired the money to the Hacienda de Caballo.

But the project was never executed, and the property "remains barren undeveloped land to this day," the complaint states.

When Chen asked for a progress report on the project, defendant Wilkinson told him that they had been forced to close their doors and were therefore unable to provide direct jobs for Chen's EB-5 visa application. Wilkinson also promised to return Chen's money so he could invest in another program, according to the complaint.

Chen claims the defendants never intended to execute the Hacienda de Caballo project or to submit the paperwork to secure an EB-5 visa for him, but gave him a fake business plan to induce him to invest so they could take his money for themselves.

Moreover, his application for an EB-5 visa was denied because the project never provided ten full-time jobs, and his daughter is now too old to quality for the same EB-5 immigrant status as Chen unless he invests $1 million in a new program, according to the complaint.

Chen seeks general and compensatory damages of $1,050,000, the lost profits he would have earned from the project had it been developed, punitive damages and disgorgement for eight causes of action, including fraud, negligent misrepresentation and unjust enrichment.

He is represented by Mark Greenberg with Musick, Peeler & Garrett.

Henry Liebman with defendant American Life told Courthouse News that Chen was not their investor.

"He invested in a project that's in our regional center but not our project. We have nothing to do with it. A regional center is among other things a geographic designation, [sic] it can have multiple projects with different owners," Liebman wrote.

He did not respond when asked for the contact information of the project manager.

According to a list of regional centers for immigrant investors going through the EB-5 program, the designated contact for the USA Global Development Co.'s proposed equestrian center in Costa Mesa is Henry Liebman with American Life Inc., according to the website for Maged & Roost Immigration Law Group.

Categories / Uncategorized

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.