U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23409 / November 19, 2015
Securities and Exchange Commission v. EB5 Asset Manager, LLC, et al., Civil Action No. 0:15-CV-62323 (S.D. Fla., filed November 3, 2015)
Assets Frozen in Alleged Immigration Scam
The Securities and Exchange Commission today announced it has obtained a court order freezing the assets of a South Florida woman and her company accused of purchasing a boat and luxury cars with money she raised from investors seeking U.S. residency through the EB-5 Immigrant Investor Pilot Program.
Under the EB-5 program, foreign citizens may qualify for U.S. residency if they make a qualified investment of at least $500,000 in a specified project that creates or preserves at least 10 jobs for U.S. workers. The SEC alleges that Lin Zhong and her company EB5 Asset Manager LLC raised at least $8.5 million for use by U.S. EB-5 Investments LLC in job-creating real estate development projects, but they diverted nearly $1 million to purchase a boat, a BMW, and a Mercedes among other improper personal uses of investor funds.
The SEC also obtained a court order appointing a receiver to administer and manage the business affairs and assets of the company and its subsidiaries for the protection of investors.
According to the SEC’s complaint filed earlier this month in U.S. District Court for the Southern District of Florida against Lin Zhong, who also goes by the name Lily Zhong:
The SEC’s complaint alleges that Zhong and EB5 Asset Manager violated 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. Zhong has agreed to stipulate to the asset freeze and receiver following a lengthy hearing on the SEC’s motions when the court issued a separate order granting expedited discovery, prohibiting the destruction of documents, and requiring Zhong, EB5 Asset Manager, and relief defendants to provide the SEC and the court with a sworn accounting of their assets.
The SEC’s continuing investigation is being conducted by Shelly-Ann A. Springer-Charles and Margaret Vizzi in the Miami office, and the case is being supervised by Eric R. Busto. The SEC’s litigation will be led by Alejandro Soto. The SEC appreciates the assistance of the USCIS.
See SEC Complaint