Immigration Law

SEC Granted TRO in Wa. EB-5 Regional Center Lawsuit: SEC v. Path America

Here is a link to a PDF combining the Complaint (pages 1-17) and the TRO (pages 18-27) issued Aug. 24, 2015 in SEC v. Path America, No. 2:15-cv-01350-JLR, W.D. Wa.

Excerpts: "Since February 2012, defendants Lobsang Dargey; Path America, LLC; Path America SnoCo LLC; Path America Farmer’s Market, LP; Path America KingCo LLC; Path America Tower, LP; Path Tower Seattle, LP; and Potala Tower Seattle, LLC (collectively, “Defendants”) have exploited a federal visa program to defraud investors seeking investment returns and a path to United States residency. To date, Defendants have fraudulently raised at least $125 million through their sales of securities to 250 investors and collected at least $11 million in additional fees.

Most of the direct victims of this fraud are foreign nationals seeking residency in the United States. Defendants Dargey, Path America, Path America SnoCo, Path America Farmer’s Market, Path America KingCo, Path America Tower, and Path Tower Seattle (collectively, the “Offering Defendants”) solicited the investments predominantly from Chinese citizens, claiming the investments would qualify under the EB-5 Program administered by United States Citizenship and Immigration Services (“USCIS”), which provides that foreign nationals may qualify for United States residency if they make a qualified investment of $500,000 or more in a specified project that is determined to have created or preserved at least 10 jobs for United States workers.

Using this lure, and the promise of investment returns, Defendants have targeted and continue to target Chinese investors in a scheme to sell securities to finance two different real estate projects, a skyscraper in downtown Seattle and a mixed-use commercial and residential development containing a farmer’s market in Everett, Washington. However, rather than use the money solely for the projects for which it was purportedly raised, Defendants have misappropriated approximately $17.6 million."

See also, SEC Sues Wash. Regional Centers Over $136M EB-5 Fraud, by Allissa Wickham, Law360, Aug. 24, 2014.