AO WANG; LING YANG; MEIFANG LI; JUNJIE ZHANG; KINGPING YIM; XUELING OUYANG vs Golden California Regional Center

Filing Date:September 11, 2020

Case:AO WANG; LING YANG; MEIFANG LI; JUNJIE ZHANG; KINGPING YIM; XUELING OUYANG Vs. BETHANY LIOU, an individual; GOLDEN CALIFORNIA REGIONAL CENTER, LLC,

Jurisdiction:California State Court

Status:Pending

Civil / Criminal:Civil

Breach of Contract

Breach of fiduciary duty

Fraud

1. This suit arises from the (i) deceitful and fraudulent actions of Defendants to cheat Plaintiffs out of EB-5 investments—totaling approximately $12 million—that Plaintiffs made with Defendants; (ii) Defendants’ breaches and anticipatory repudiation of the Limited Partnership Agreement of GCRC Diamond Creek (the “LPA”), attached as Exhibit 1; (iii) Defendants’ conduct in breach of the loan documents between GCRC Diamond Creek and Monterey Dynasty (the “Loan Documents”), attached as Exhibit 2, of which Defendants are now in default; and (iv) breach of trust that Plaintiffs had placed in Defendants to safeguard and lawfully grow their investments.

2. Unfortunately, this is not the first or only suit against Defendants for such actions with respect to EB-5 investors. In fact, there are a number of suits pending against Defendants for their misdeeds (including three related cases pending in this court) as well as a completed SEC action against Defendants that ordered Defendants to pay back nearly $50 million in investor funds. Defendants’ other lawsuits accuse them of misappropriation of EB-5 investments and the non-payment of debts totaling over $50 million dollars.

3. The EB-5 program, created by Congress in 1990 through the Immigration Act of 1990, offers EB-5 visas to foreign individuals who invest a minimum of $500,000 in a new commercial enterprise located in a rural area or an area of high unemployment. The purpose of the program was to stimulate the U.S. economy through job creation and capital investment by foreign investors.

4. Defendant Liou is the manager and chief executive officer of Defendant Golden California Regional Center, an EB-5 Regional Center that manages limited partnerships, including, but not limited to, Defendant GCRC Diamond Creek.

5. Plaintiffs are part of a group of Chinese nationals who, in or around 2015, each paid $550,000 to Defendants Liou and Golden California Regional Center to become limited partners in Defendant GCRC Diamond Creek—the total amount of funds invested is $12 million.1 Such payments were part of the EB-5 Program, and Plaintiffs sought green cards through such investments.

6. Between 2015 and the present, Defendants Liou and Golden California Regional Center misappropriated Plaintiffs’ money in bad faith and concealed their wrongdoing from Plaintiffs as part of a scheme to unjustly enrich themselves at Plaintiffs’ expense.

7. As stated in the Private Placement Memorandum (the “PPM”) – attached as Exhibit 3 – and the LPA, the Plaintiffs make up make up 100% of the Limited Partners of GCRC Diamond Creek.2 Pursuant to the PPM and the LPA, Plaintiffs have the authority to vote to

dissolve GCRC Diamond Creek.

8. Under the terms of these Agreements, GCRC Diamond Creek loaned Plaintiffs’ investment funds to Monterey Dynasty in order to finance the acquisition and development of their EB-5 Project (the “Loan”).4

9. Defendant Liou is the manager and sole owner of Defendant Monterey Dynasty.

10. The PPM and the Loan Documents state that the Loan is secured by a lien on the assets of Defendant Monterey Dynasty.6 However, Defendant Liou has now claimed that the Loan is not secured by any of Monterey Dynasty’s assets, which directly contradicts the terms of the PPM and the Loan Documents. Defendant Liou made this new misrepresentation in order to protect her own assets.

11. Pursuant to the terms of the Loan Documents, Defendant Monterey Dynasty affirmatively represented it possessed good and marketable title to all of its properties and assets, and that all of its assets were unencumbered when the Loan Agreement was executed. Defendant Monterey Dynasty further represented that, at the time the Loan Documents were executed, it was neither party to nor aware of any pending or threatened litigation, and that it would advise Plaintiffs of any litigation which might affect their security interests.

12. However, upon examination by a property expert—a report of which is attached hereto as Exhibit 4—Plaintiffs’ learned that at least two of the three properties owned by Defendant Monterey Dynasty were encumbered by deeds of trust when the Loan Documents were

executed.

13. As of today, there are at least five lawsuits to which Monterey Dynasty is a party. Plaintiffs were neither aware of or apprised of any of these lawsuits, which constitutes a material breach of the Loan Documents.

14. Under its terms, the LPA may only be amended upon the written approval of all of the partners of GCRC Diamond Creek.10 However, Defendant Liou claims she is working unilaterally to amend the LPA to eliminate the provision that the Loan is secured by Defendant Monterey Dynasty’s assets. A true and correct copy of the proposed amendment to the LPA is attached here to as Exhibit 5. Neither the PPM nor the LPA give Defendant Liou the authority to do with without Plaintiffs’ consent, and to do so constitutes a breach of both Agreements.

15. Plaintiffs have relied to their detriment on Defendants’ representation that the Loan is secured by Defendant Monterey Dynasty’s assets.

16. Defendants’ misrepresentations and conduct in breach of the Agreements have placed Defendant Monterey Dynasty in default of the Loan. Pursuant to the terms of the Loan Documents, this requires the Loan to be repaid to Plaintiffs immediately.

17. The evasive actions of Defendants toward Plaintiffs, combined with the information Plaintiffs have uncovered about other pending lawsuits and allegations against Defendants Liou and Golden California Regional Center, have confirmed Plaintiffs’ worse fears. that Plaintiffs’ funds have been misappropriated, and Defendants continue to fraudulently conceal their conduct to Plaintiffs’ detriment.

THE PARTIES

18. Plaintiffs are all citizens of the People’s Republic of China. Plaintiffs are part of a group of investors who paid $550,000 each to Defendants Liou and Golden California Regional Center to become limited partners in Defendant GCRC Diamond Creek in order to obtain green cards as EB-5 investors. Together, Plaintiffs constitute the majority of interestholders in GCRC Diamond Creek.

19. Defendant Bethany Liou is the chief executive officer and sole manager of Defendant Golden California Regional Center. Liou is also the sole owner and manager of Defendant Monterey Dynasty. Liou is also the sole operator of various other business entities including, but not limited to, Oak Meadow Plaza, LLC, Diamond Creek Villa, LLC, and Diamond Creek Villa, a Corporation. Liou resides in Northern California in the County of Santa Clara.

20. Defendant Golden California Regional Center is a California limited liability company. It was registered with the California Secretary of State on December 6, 2012. Its principal place of business is 228 Hamilton Ave, 3rd Floor, Palo Alto, California 94301. Its sole manager is Defendant Liou. Defendant Golden California Regional Center is the general partner of Defendant GCRC Diamond Creek.

21. Defendant GCRC Diamond Creek is a limited partnership. It was registered with the California Secretary of State on May 7, 2014. The general partner of GCRC Diamond Creek is Defendant Golden California Regional Center. Its agent for service of process is Defendant Liou. Its principal place of business is 228 Hamilton Ave, 3rd Floor; Palo Alto, California 94301.

22. Defendant Monterey Dynasty is a California limited liability company. It was registered with the California Secretary of State on June 1, 2005. Its agent for service of process is Defendant Liou. Its principal place of business is 21701 Stevens Creek Blvd, Suite 2610; Cupertino, California 95014. Defendant Liou is the sole owner of Defendant Monterey Dynasty.

23. Plaintiffs do not know the true names and capacities of Defendants Does 1 through 50, inclusive, but allege that these Defendants are responsible in some manner for the acts, omissions, incidents, transactions, and/or events alleged herein, and Plaintiffs therefore sue each of them by such fictitious names. Plaintiffs will amend this complaint to state the true names and capacities of said Defendants when they are ascertained. Each and every reference in this Complaint to Defendants, or any of them, is intended to and shall be deemed to include all fictitiously named Defendants.

24. Plaintiffs are informed and believe that Defendants and DOE Defendants were the agent, representative, partner, joint-venturer, co- participant, and/or co-conspirator of each of the other Defendants and that in doing the acts alleged herein, each Defendant was acting individually as well as within the course and scope of such relationship, with full knowledge and consent of or ratification by the other Defendants.

25. Plaintiffs are informed and believe that, at all relevant times, Defendants, and each of them, pursued a common course of conduct, acted in concert and conspired with one another, and aided and abetted one another to accomplish the wrongs alleged herein.

26. There exists, and at all times relevant herein there existed, a unity of interest and ownership by, between and amongst Defendants and DOES 1 through 50 (“Defendant Entities”), such that their separateness has ceased to exist and that treatment of the acts alleged herein as those of each individual entity by themselves would result in an inequitable result. Plaintiffs are informed and believes that Defendant Liou operates various business entities, including but not limited Golden California Regional Center and Does 1 through 50, and in doing so, she has a unity of interest with Defendant Entities whereunder she wrongfully commingles funds to perpetrate fraud, circumvent statutory law and accomplish wrongdoing for her personal benefit.