SEC Charges Lawyer and Her Husband in Eb-5 Fraud
Defendants Allegedly Altered Evidence in Cover Up
Litigation Release No. 24319 / October 18, 2018
Securities and Exchange Commission v. Jean Danhong Chen, Tony Jianyun Ye, Kai Hao Robinson, Kuansheng Chen, Law Offices of Jean D. Chen, A Professional Corporation, Tree Lined Holdings, LLC, And Golden State Regional Center, LLC, No. 3:18-civ-06371 (N.D. Cal. filed October 18, 2018)
The Securities and Exchange Commission today charged a California-based immigration attorney and her husband in a fraudulent scheme that generated millions of dollars of undisclosed compensation from foreign investors seeking permanent U.S. residency through the EB-5 Immigrant Investor Program.
The SEC's complaint alleges that Jean Danhong Chen, Tony Jianyun Ye, and Law Offices of Jean D. Chen, with the assistance of a personal friend, Kuansheng Chen, secured over $10 million in undisclosed commissions by selling EB-5 securities to hundreds of Chen's legal clients. The complaint also alleges that Jean Chen and Ye secretly acquired and operated an EB-5 regional center, Golden State Regional Center, LLC, and later advised clients to invest in the center's projects without disclosing their ownership interest. According to the complaint, Kai Hao Robinson assisted in the scheme by posing as the sole manager in control of Golden State when she was in fact merely a figurehead controlled by Jean Chen and Ye.
After learning of the SEC's investigation, Jean Chen and Ye allegedly backdated documents and scrubbed other business records to conceal their role in the alleged scheme.
The SEC's complaint charges: Jean Chen, the Law Offices, and Golden State with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Ye, Kuansheng Chen, Robinson, Tree Lined and the Law Offices with aiding and abetting those violations; Jean Chen, Ye, and the Law Offices with violating Section 15(a) of the Exchange Act, and Kuansheng Chen with aiding and abetting those violations; Jean Chen with control person liability under Section 20(a) of the Exchange Act for the Law Offices' violations; Jean Chen and Ye with control person liability under Section 20(a) of the Exchange Act for Golden State's violations; and in the alternative, Kuansheng Chen with liability for disgorgement as a relief defendant.
The SEC's investigation was conducted by D. Ashley Dolan, Sarah M. Hall, and Heather A. Powell and supervised by Melissa A. Robertson of the SEC's Washington, D.C. office. The litigation will be led by Kenneth W. Donnelly. The SEC would like to thank the U.S. Citizenship and Immigration Services for its assistance in connection with this investigation.