Flushing couple accused of scamming millions of Chinese investors: SEC – QNS.com
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Federal regulators have charged a Flushing couple with security fraud in connection with two real estate projects in Queens.
The Security and Exchange Commission (SEC) filed a lawsuit in Brooklyn Federal Court alleging that luxury developer Richard Xia and his company Fleet New York Metropolitan Regional Center LLC had scammed hundreds of Chinese nationals over $ 229 million via the EB-5 offers to finance the Eastern Mirage project in Flushing and the Eastern Emerald project in Corona.
EB5 Affiliate Network (EB5AN) helps foreign investors obtain U.S. permanent residency, or green cards, by investing in U.S. real estate development projects in accordance with the guidelines of the EB-5 Immigrant Investor program, an effort of the US government that encourages new investment in job creation. projects.
The SEC complaint alleges that from 2010 to the end of 2017, Xia, through Fleet, fraudulently raised more than a quarter of a billion dollars from more than 450 investors for the two real estate development projects.
According to the complaint, the offer documents made false statements regarding the sources of funding for the projects, the experience of the project’s development and construction team, the scope of the Eastern Emerald project and the existence of leases. between several entities that Xia owns and controls. Additionally, Xia allegedly embezzled around $ 17 million from Eastern Mirage investor funds and at least $ 11.8 million from Eastern Emerald investor funds.
The SEC complaint, filed in Brooklyn Federal District Court on September 28, accuses Xia and Fleet of violating anti-fraud provisions of federal securities laws. The complaint seeks, among other remedies, a permanent injunction, restitution, pre-judgment interest, civil penalties, an asset freeze and the appointment of a monitor. The lawsuit also names Xia’s wife, Julia Yue, as a defendant in damages and demands restitution and pre-judgment interest from her.
The couple allegedly demanded $ 500,000 from each investor in addition to a $ 50,000 processing fee according to the SEC complaint.
“Developers offering securities under the E-5 program have a responsibility to be honest with their investors,” said Richard Best, director of the SEC’s regional office in New York. “As we allege in our complaint, Xia has embezzled millions of investor funds and misled investors about project funding and the experience of project development and construction teams.”
The Eastern Mirage project, located at 42-31 Union St. in Flushing, was due for completion in 2013 but remains “an unfinished, empty glass tower,” according to the complaint.
The Eastern Emerald Project, located at 112-21 Northern Blvd. in Corona, has barely started and the complaint describes the site as “a largely vacant earthen hole surrounded by a concrete wall”. The real estate company had previously announced that it would be completed by 2024.