Two EB-5 Scam Artists Convicted, Sentenced to Jail

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By Joe Guzzardi

Joe is a CAPS Senior Writing Fellow whose commentaries about California's social issues have run in newspapers throughout California and the country for nearly 30 years. Contact Joe at joeguzzardi@capsweb.org, or find him on Twitter @joeguzzardi19.

The writer's views are his own.

August 22, 2017
Good news for common sense immigration proponents is always welcome. And when it involves a just jail sentence for scam artists which may also serve as a deterrent for future fraudsters, that’s a bonus.

For years, CAPS has opposed the routinely abused EB-5 visa, often referred to as the citizenship-for-sale visa. For those who may need a refresher course on the EB-5, in exchange for a token $500,000 investment in a commercial venture which can be withdrawn after two years, the overseas financier, his or her spouse and minor children will get permanent residency green cards that provide a path to citizenship. 
SEC receives hundreds of EB-5 complaints regarding fraudulent schemes and misappropriation
 of investors’ funds. 


The investor may have no qualifications other than his bank account, never has to visit the U.S. or be involved in the project’s development in any way beyond signing the check. Moreover, the company isn’t required to, as President Trump would put it, “hire American,” and in fact often employ non-citizen family members or relatives. The visa does, however, create hundreds of jobs for lobbyists, immigration lawyers and consultants paid to entice foreign capitalists to apply, and to persuade Congress, successfully so far, to renew it annually. The EB-5 is next scheduled to sunset on September 30.

In jail are Lobsang Dargey, who claims to have been a Tibetan monk, and Anshoo Sethi. Dargey agreed to a plea deal for perpetrating a Washington state real estate swindle that defrauded mostly Chinese investors out about $240 million, and was sentenced to four years.

Sethi, who pled guilty to wire fraud and received a three year sentence, duplicitously raised $160 million, again mostly from Chinese nationals, for a failed hotel and convention center near Chicago’s O’Hare airport. District Court Judge told Sethi: "You took advantage of hundreds of other people for your own personal gain.”

Remember that before Dargey and Sethi could deceive their investors, they first had to fool the federal government into believing that they were legitimate, apparently an easy hurdle to overcome. 

Encouragingly, lawyers predict that future charges may be brought against other known swindlers. With luck, by the time the September 30 EB-5 sunset date rolls around, Congress may have seen the light and decide to kill the heavily abused visa.
 
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