BENJAMIN ROBERTSONbenjamin.robertson@scmp.com
PUBLISHED : Wednesday, 26 August, 2015, 12:57pm
UPDATED : Wednesday, 26 August, 2015, 1:59pm
The US Securities and Exchange Commission accuses Lobsang Dargey of spending millions of US dollars of investors' money on himself. Photo: AFP
American regulators have frozen the assets of an investment consultant accused of defrauding millions of US dollars from 250 Chinese applying for US residency.
The US Securities and Exchange Commission alleges that Lobsang Dargey, CEO of immigration investment consultancy Path America, raised at least US$125 million from investors. But he “diverted” US$14 million into real estate projects “unrelated” to the investment proposals pitched to investors, while a further US$3 million went on “personal use including the purchase of his US$2.5 million home and cash withdrawals at casinos,” the SEC announced.
Based in Washington state, the company has offices in Hong Kong and Beijing.
“We allege that Dargey promised investors their money would be used to develop specific real estate projects approved under the EB-5 programme, but he misused millions of dollars to enrich himself and jeopardised investors’ prospects for US residency,” said Jina Choi, director of the SEC’s San Francisco regional office.
READ MORE: US inestment schemers 'out to dupe' Chinese would-be immigrants
“Dargey failed to tell investors that he and his companies had departed from the business plan by using investor money for personal expenses and unrelated projects,” the SEC announced.
The money was originally earmarked for several redevelopment projects in the Seattle area as part of an US investment immigration program called EB-5. Under this programme, foreigners seeking US residency, or green-card status, can invest a minimum US$500,000 into authorised job-creating projects.
Though there is an obvious attraction for the US government to use foreign money to boost local employment, the EB-5 programme has been linked to a succession of fraudulent schemes, often involving Chinese money.
Among other recent examples, last month, the SEC shut down what it described as a US$68 million Ponzi scheme involving Luca International Group and its CEO Yang Bingqing. The firm held itself out as a successful oil and gas operation, but was allegedly a conduit for investor money to fund Yang’s lavish lifestyle.
Earlier this year the US-China Economic and Security Review Commission warned that fraudsters were targeting Chinese. “An imminent risk concerning the EB-5 programme is outright investor fraud. The EB-5 programme has recently been flooded by wealthy Chinese nationals,” the commission said in a report.
http://m.scmp.com/news/hong-kong/economy/article/1852702/us-regulator-freezes-assets-immigration-consultant-accused
