A path to U.S. citizenship premised on an immigration
program crafted to help create jobs, and surrounded with misrepresentations and
false documents was the lure used by Anshoo Seithi and his controlled entities
to defraud 250 investors of millions of dollars, according to an SEC complaint.
The Commission obtained a temporary asset freeze over $145 million in investor
funds and a retraining order at the time of filing its complaint against Mr.
Seithi, A Chicago Convention Center, LLC and Intercontinental Regional Center
Trust of Chicago, LLC, both recently formed entities. SEC v. A Chicago
Convention Center, LLC, Case No. 13cv982 (N.D. Ill. Filed Feb. 6, 2013).
The EB-5 Program was created as part of the 1990
Immigration and Nationality Act. It promised foreign nationals who invested $1
million creating or preserving at least 10 U.S. workers jobs in this country
the opportunity to obtain a green card. Alternatively, $500,000 could be
invested in a high unemployment or rural area. The program is administered by
the U.S. Citizenship and Immigration Service or USCIS.
Mr. Seithi used this program to solicit investors to
purchase notes in A Chicago Convention Center, claiming it would build and
operate what he called the World's First Zero Carbon Emission Platinum LEED certified"
hotel and conference center in the Chicago area. The conference center was
supposed to generate over 8,000 jobs, thus qualifying it for the EB-5 Program.
Investors were asked to wire a minimum of $500,000 each for their investment
and, in addition, $41,5000 as an administrative fee. Investor funds would be
held in escrow. Those funds would only released to Defendants if USCIS
determined that: (1) the hotel project was capable of generating the minimum
number of jobs to qualify for the EB-5 program; and (2) adjudication of the
individual investors' application for a provisional visa, a preliminary step
toward obtaining a green card. Those procedures did not, however, apply to the
The offering memorandum claimed the project was moving
forward. Several major hotel chains were part of the project, according to the
document. All necessary permits and approvals to construct the project were in
place investors were told. And, defendants would contribute real estate valued
at over $177 million.
The representations were false, according to the SEC's
complaint. Contrary to the offering memorandum claims, Starwood,
Intercontinental and Hyatt hotels had not executed franchise agreements. Few
steps have been taken to move the project forward. The land that would be
contributed was vastly overvalued. And, a falsified letter purporting to be
from Hyatt Hotels was furnished to USCIS in an effort to secure provisional
approval. A significant amount of the $10,726,466 collected as administrative fees
has been misappropriated.
The Commission's complaint alleges violations of
Securities Act Sections 17(a)(1) & (2) and Exchange Act Section 10(b). The
case is in litigation. See also Lit. Rel. No. 22615 (Feb. 8, 2013).
For more cutting edge commentary on
developing securities issues, visit SEC Actions, a
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