Federal prosecutors are suing to seize nine properties, worth a total of $30 million, that they say a purported senior living community developer bought with proceeds from a multimillion dollar scheme to defraud the federal government through the EB-5 visa program and obtain “green cards” for some fugitives who are on China’s “Most Wanted” list.
The FBI and Department of Homeland Security had raided the San Gabriel, CA, business office of California Investment Immigration Fund and two residences on April 5. The nine lawsuits filed May 24 in U.S. District Court allege that attorney Victoria Chan and her father, Tat Chan, operated the business from 2008 until this year.
The asset forfeiture complaints claim that CIIF exploited the EB-5 Immigrant Investor Program, administered by U.S. Citizenship and Immigration Services, part of the Department of Homeland Security. The program is designed to provide lawful, permanent residence to foreigners in exchange for their investing at least $500,000 in a U.S. business visa program that creates 10 new American jobs.
On its website, which no longer is active, CIIF said its EB-5 projects focused on financing and developing commercial and mixed-use real estate projects including senior living facilities and other housing, hotels, restaurants and retail. “No real construction actually took place at any of the proposed project locations,” however, alleged case documents related to the April 5 raid.
“Rather than legitimately investing the funds into American businesses, CIIF either refunded the funds to the EB-5 investors while the investors’ EB-5 petitions were pending, in direct violation of the EB-5 program, or stole millions of dollars to use for personal expenditures, including buying million-dollar homes,” according to the May 24 lawsuits, which allege “many foreign nationals were able to improperly obtain U.S. green cards.”
After the April raid, a spokeswoman for U.S. Immigration and Customs Enforcement told McKnight’s Senior Living that investigators believed that many of the “investors” in the scheme were complicit in the fraud, although it was possible that some thought the projects were legitimate and were duped.
Four of the affected investors sued in civil court May 19, according to the Los Angeles Times. They allege breach of contract and other charges and are seeking the return of their individual $500,000 investments plus remuneration for emotional and financial distress, according to the media outlet.
The May 24 lawsuits brought by the federal government seek the forfeiture of a commercial property valued at more than $3 million; five residences worth approximately $4 million to $5.5 million; and three parcels of land valued at almost $6 million to more than $7.7 million. According to the complaints, the properties were purchased with proceeds from mail fraud, wire fraud or visa fraud and that the purchases constitute money laundering.
The investigation is ongoing, but it has caught the eye of Senate Judiciary Committee Chairman Charles Grassley (R-IA), who in an April 20 letter asked Homeland Security Secretary John Kelly to provide extensive information about the case.
California Investment Immigration Fund has not responded to a request for comment that McKnight’s Senior Living made at the time of the raid. The business no longer is in operation.