The Securities and Exchange Commission has announced charges and an asset freeze against the man and two companies behind an investment scheme aimed at defrauding foreign investors.
Specifically, it says the plot was focused on those looking for profitable returns and a legal path to U.S. residency through a federal visa program.
The SEC alleges Anshoo R. Sethi created A Chicago Convention Center (ACCC) and Intercontinental Regional Center Trust of Chicago (IRCTC) to fraudulently sell more than $145 million in securities. It adds he collected $11 million in administrative fees from more than 250 investors mostly from China.
Read: Dormant shell companies are ripe for fraud
The SEC says customers believed they would be financing they would be “financing construction of the ‘World’s First Zero Carbon Emission Platinum LEED certified’ hotel and conference center near Chicago’s O’Hare Airport”, while also enhancing their prospects for U.S. citizenship through the EB-5 Immigrant Investor Pilot Program.
According to the SEC’s complaint, the EB-5 program enables foreign investors to possibly qualify for a green card if they invest $1 million in a project that creates or preserves at least 10 jobs for U.S. workers, excluding the investor and his or her immediate family.
It adds swift coordination between its staff and USCIS brought the scheme to a halt in its application stage at USCIS. The SEC filed its complaint under seal earlier this week, and then obtained an emergency court order to protect the remaining $145 million in investor assets that were at risk.
“Sethi orchestrated an elaborate scheme and exploited these investors’ dreams of earning legal U.S. residence along with positive returns on their investments,” says Stephen L. Cohen, associate director in the SEC’s Division of Enforcement.
The SEC alleges Sethi told investors he has “[more than] fifteen years experience in real estate development and management, specifically in the lodging area.”
The SEC’s adds Sethi, ACCC, and IRCTC violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. In addition to the temporary restraining order and asset freeze granted by the court, the SEC’s complaint seeks permanent injunctions and other monetary relief.
Read:
Second-Gen immigrants craving advice
Tax issues for immigrant clients