SEC v. Palm House Hotel, LLLP, et al.
Case No. 18-cv-81038 (S.D. Fl.)
On August 18, 2018, the Commission filed a complaint (the “Complaint”) against Palm House Hotel, LLLP (“PHH”), South Atlantic Regional Center, LLC (“SARC”), Joseph J. Walsh, Sr. (“Walsh”), Robert V. Matthews (collectively, the “Defendants”), and named 160 Royal Palm, LLC (“Royal Palm”) and United States Regional Economic Development Authority LLC d/b/a EB5 Petition (“USREDA”) as relief defendants. According to the Complaint, from November 2012 to March 2015, the Defendants defrauded 88 investors participating in the Immigrant Investor Program (“EB-5 Program”) of approximately $44 million by misrepresenting that PHH would loan investor funds to Palm House LLC to acquire, develop, and operate the Palm House Hotel located in Palm Beach, Florida. Instead, Walsh and Matthews misappropriated a significant portion of the investor funds. See Complaint.
On December 20, 2019, the Court entered final judgment against Royal Palm, ordering Royal Palm to pay disgorgement and prejudgment interest of $27,671,214.35. See Royal Palm’s Final Judgment. By final judgments entered on March 11, 2020, the Court ordered SARC, Walsh and USREDA to pay a total of $65,172,165 in disgorgement and prejudgment interest, and ordered Walsh to pay a civil penalty of $8,078,000. See SARC’s Final Judgment, Walsh’s Final Judgment, and USREDA’s Final Judgment.
Royal Palm is currently subject to Chapter 11 bankruptcy proceedings in the Southern District of Florida (18-19441-EPK) and the Commission has collected approximately $5 million of its judgment against Royal Palm through those bankruptcy proceedings.
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