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SEC v. Liu

United States District Court for the Central District of California, Southern Division

April 20, 2017, Decided; April 20, 2017, Filed

Case No.: SACV 16-00974-CJC(AGRx)

Opinion

 [*960]  ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AGAINST DEFENDANTS LIU AND WANG

I. INTRODUCTION

Defendant Charles C. Liu formed and controlled three corporate entities, Beverly Proton Center, LLC ("Beverly Proton"), Pacific Proton EB 5 Fund LLC ("PPEB5 Fund"), and Pacific Proton Therapy Regional Center ("Pacific Proton") (together with PPEB5 Fund and Beverly Proton, "Corporate Defendants"), purportedly to build and operate a proton therapy cancer treatment center in southern California. Liu financed the cancer center with nearly $27 million dollars of international investment through the EB-5 Immigrant Investor Program.

Instead of pursuing proton therapy, Liu funneled over $20 million of investor money to himself, his wife Defendant Xin Wang, and marketing companies associated with them. Millions of dollars were [**3]  transferred shortly after Plaintiff Securities and Exchange Commission ("SEC") subpoenaed Liu as part of the SEC's initial investigation in February 2016.

 [*961]  The SEC now seeks summary judgment against Liu and Wang. For the following reasons, the Court GRANTS the SEC's motion. A judgment and permanent injunction shall issue forthwith.

II. FACTUAL BACKGROUND

Liu used the EB-5 Immigrant Investor Program to ostensibly develop and run a proton cancer therapy center in Montebello, California. (See Dkt. 7 [hereinafter "Regenstreif Decl."] Ex. 1 at 10, 14, 36; Dkt. 200-1 ¶ 9.) Through that program, foreigners can obtain permanent residency in the United States by investing at least $500,000 in a "Targeted Employment Area" and thereby creating at least ten full-time jobs for United States workers.1 (Dkt. 200-1 ¶ 5; see also Dkt. 81 at 2 n.3.) Investments are often administered by "regional centers," which are designated and approved by the United States Customs and Immigration Service ("USCIS") as EB-5 eligible projects. (Dkt. 200-1 ¶ 1.)

1. Formation of Corporate Defendants and the EB-5 Offering

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262 F. Supp. 3d 957 *; 2017 U.S. Dist. LEXIS 216503 **

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. CHARLES C. LIU; XIN WANG a/k/a LISA WANG; PACIFIC PROTON THERAPY REGIONAL CENTER, LLC; PACIFIC PROTON EB-5 FUND, LLC; and BEVERLY PROTON CENTER, LLC f/k/a LOS ANGELES COUNTY PROTON THERAPY, LLC, Defendants.

Subsequent History: Affirmed by SEC v. Liu, 2018 U.S. App. LEXIS 30133 (9th Cir. Cal., Oct. 25, 2018)

Prior History: SEC v. Liu, 2016 U.S. Dist. LEXIS 91078 (C.D. Cal., July 11, 2016)

CORE TERMS

investors, Proton, Monitor's, repatriation, injunction, permanent, therapy, misappropriate, disgorgement, deposit, ownership, scienter, expended, emails, solicitation, brokerage, genuine, interrogatories, entities, untrue, indirectly, omissions, salaries, dollars, cancer, card, tier, fraudulent, converted, annually