U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23410 / November 20, 2015
Securities and Exchange Commission v. Justin Moongyu Lee, Civil Action No. 2:14-cv-06865 (C.D. Cal.)
SEC Obtains Final Judgments Against Los Angeles Based Immigration Attorneys Who Defrauded Investors Seeking U.S. Residency, Ordering Payment of Over $8 Million in Monetary Relief
The Securities and Exchange Commission announced that it has obtained final judgments against a former Los Angeles-based immigration attorney, his wife, his former law firm partner and five entities he controlled for conducting an investment scheme to defraud foreign investors seeking to come to the U.S. through the EB-5 Immigrant Investor Program.
On October 29, 2015, the United States District Court for the Central District of California entered a final judgment against Defendant Justin Moongyu Lee, formerly an immigration attorney with an office in Los Angeles, and five entity defendants he controlled, after granting the Commission's motion for entry of a final judgment by default. In addition to permanently enjoining the defendants from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the judgment orders that the defendants are jointly and severally liable for disgorgement of $7,210,000, together with interest of $1,052,403.73, for a total of $8,262,403.73, and further orders Justin Lee to pay a civil penalty of $150,000.
Previously, on September 22, 2015, the court entered final judgments against Justin Lee's wife, Rebecca Taewon Lee, and his former law partner, Thomas Edward Kent, pursuant to their consents. In addition to permanently enjoining Rebecca Lee and Kent from future violations of antifraud provisions, the court ordered them to pay disgorgement and penalties. Rebecca Lee was ordered to disgorge $92,255.85, together with interest of $13,207.31 for a total of $105,463.16, and to pay a civil penalty of $92,255.85; Kent was ordered to disgorge $102,548.20 together with interest of $14,680.80 for a total of $117,229, and to pay a civil penalty of $102,548.20. Previously, Kent had consented to entry of a permanent injunction and to be denied the privilege of appearing or practicing before the Commission as an attorney, with monetary relief to be determined at a later date. Rebecca Lee and Kent consented to entry of the judgments against them without admitting or denying the Commission's allegations.
The SEC alleged that the defendants raised nearly $11.5 million from two dozen investors, primarily from China and South Korea, who sought to participate in the EB-5 program, which provides immigrants an opportunity to apply for U.S. residency by investing in a domestic project to create jobs for U.S. workers. The Lees and Kent told investors that they would be EB-5 eligible if they invested in an ethanol production plant the defendants would build and operate in Ulysses, Kansas. Instead, the defendants misappropriated the investors' monies. The plant was never built and the promised jobs never created, yet the Lees and Kent continued to misrepresent to investors that the project was ongoing.
See also Litigation Release No. 23077 (September 4, 2014); Securities Exchange Act Rel. No. 74385 (February 26, 2015).