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SEC Freezes Assets in Alleged Immigration Scam

Chris Lange

Published: November 19, 2015 4:07 pm

Last Updated: January 13, 2020 4:57 pm

The U.S. Securities and Exchange Commission (SEC) announced that it has obtained a court order freezing the assets of a South Florida woman and her company, and accusing them of purchasing a boat and luxury cars with money raised from investors seeking U.S. residency through the EB-5 Immigrant Investor Pilot Program.

For some background on 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 raised at least $8.5 million for use by U.S. EB-5 Investments 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. Other uses for the funds included her own real estate taxes as well as education expenses for her family members.

Zhong and EB5 Asset Manager are also alleged to have falsely claimed that certain investors’ funds would be held in escrow until the form filed by potential EB-5 investors to petition the U.S. Citizenship and Immigration Services (USCIS) for immigration status received that agency’s approval. She also made material omissions and false statements about conflicts of interest, and made false statements about the location of real estate development projects.

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.

Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said:

We allege that Zhong promised investors their money would be used to develop real estate projects, but she misused their funds to enrich herself while making material misrepresentations and omissions to investors.

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