Combining Immigration Fraud and Investment Fraud

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The EB-5 Immigrant Investor Program sounds like a scam so I’m not surprised to see it pop up in actual scams. The EB-5 program provides foreign investors who can demonstrate that their investments are creating jobs in this country with an expedited path to lawful permanent residency in the United States. EB-5 is not common with real estate investors because construction does not provide the permanent jobs required by the program. (The exception is hotels.)

The Securities and Exchange Commission brought charges against Justin Moongyu, Rebecca Taewon Lee and Thomas Edward Kent for combining an EB-5 program with an investment scam. The three raised $11.5 million for investment in a Ulysses, Kansas ethanol production plant. According to the SEC complaint the three were promoting a positive investment return coupled with a path to legal residency in the United States.

The SEC alleges that the three diverted over $7 million of the investor’s money to unrelated projects and personal use. The plant was never built.

As you might expect, the SEC complaint spends a chunk of the pleading showing that the fraud involves securities. The SEC states a case that (1) there was investment of money, (2) there was a common enterprise, and (3) profits were to be derived from the efforts of others.

Although it’s not clear from the case filings, I assume the investors not only lost their money, but also lost their path to citizenship.

Sources:

USA-NYC-Ellis Island
CC BY-SA 3.0

By: Ingfbruno

 

Author: Doug Cornelius

You can find out more about Doug on the About Doug page

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