CHICAGO (CN) - A 29-year-old Illinois man defrauded investors, mostly Chinese, of $156 million in a visa and immigration scam, the SEC claims in court.
The SEC sued Anshoo R. Sethi and his two businesses, A Chicago Convention Center LLC and the Intercontinental Regional Center Trust of Chicago LLC, in Federal Court.
Sethi sold more than $145 million in securities and collected $11 million in "administrative fees" from more than 250 suckers, the SEC said.
"Over the past 18 months, defendants have perpetuated a large scale investment scheme to exploit a federal visa program as a means to defraud investors seeking strong returns and a legal path to U.S. residency," the SEC says in the complaint. "Defendants fraudulently sold over $145 million in securities and collected an additional $11 million in administrative fees from more than 250 investors. These investors, however, were duped on the basis of false and misleading information supplied by defendants.
"The victims of this fraud are foreign nationals seeking a pathway to citizenship in the United States. The Immigration and Nationality Act of 1990 provided a method for foreign nationals to obtain U.S. residency by investing in domestic projects that will create or preserve a minimum number of jobs for U.S. workers. Known as the EB-5 Program and administered by U.S. Citizenship and Immigration Services (or 'USCIS'), this program provides that foreign nationals may qualify to obtain a green card if the individuals invest $1,000,000 (or at least $500,000 in a 'Targeted Employment Area' i.e., a high unemployment or rural area), creating or preserving at least 10 jobs for U.S. workers, excluding the investor and his or her immediate family.
"Using the lure of gaining a pathway to U.S. citizenship through the EB-5 Program visa, defendants targeted Chinese investors in a scheme to sell securities - interests in ACCC, an Illinois limited liability company-purportedly to finance and build the 'World's First Zero Carbon Emission Platinum LEED certified' hotel and conference center in the Chicago area. To date, defendants have convinced over 250 Chinese investors to wire a minimum of $500,000 apiece plus a $41,500 'administrative "fee"' to the defendants' U.S. bank accounts."
Sethi claimed in a 2011 "Confidential Private Offering Memorandum" that "several major hotel chains have signed on to the defendants' project, that defendants have
acquired all the necessary permits and approvals to construct the project, that the defendants will contribute land valued at over $177 million to the project, and that the project is likely to generate over 8,000 jobs, thereby serving as a qualifying U.S.-based investment for purposes of the EB-5 Program," the complaint states.
But it was bogus: "As the fraud described is ongoing and is likely to continue, and over $145 million of investor funds remain at risk of being misappropriated, the SEC seeks emergency ex parte relief in this action to enjoin violations of the anti-fraud provisions of the federal securities laws, freeze assets, secure a preliminary injunction and other equitable relief," the SEC says.
The "managing members" of the defendant LLCs are Anshoo Sethi and Ravinder Sethi, and the Intercontinental has a third managing member, Ranjna Sethi, the SEC says. Only Anshoo Sethi is named as an individual defendant in this complaint.
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