SEC Brings Civil Charges In $79M Visa Investment Scheme

The U.S. Securities and Exchange Commission brought civil charges Tuesday against a company that took in $79 million from allegedly brokering illegal residency visas through the Immigrant Investor Program.

It charged Boca Raton-based Ireeco LLC and Hong Kong-based Ireeco Ltd. with wrongfully providing 150 people with investments in EB-5 visas, acting in an unregistered capacity from at least January 2010 to May 2012. The program provides visas and paths to citizenship for foreigners who invest at least $500,000 in businesses that create jobs.

The agency says it's the first time that such brokers have been charged.

“The EB-5 program administered by the U.S. Citizenship and Immigration Services (USCIS) provides a path to legal residency for foreigners who invest directly in a U.S. business or private 'regional centers' that promote economic development in specific areas and industries,” the SEC said in a statement.

Ireeco “used their website to solicit EB-5 investors, some of whom were already in the U.S. on a temporary visa. While Ireeco LLC and Ireeco Limited promised to help investors choose the right regional center to invest with, they allegedly directed most EB-5 investors to the same handful of regional centers, ones that paid them commissions of about $35,000 per investor” after USCIS approved green cards, the agency said.

The two entities did not admit to or deny the charges, but agreed to their censure, and agreed to desist from the behavior.

Even though it never registered as a broker-dealer, the SEC says, Ireeco was “paid fees for actively soliciting over 158 foreign investors for selected regional centers … invest[ing] a combined total of $79 million.”

Meanwhile, in another recent case, the Fifth Circuit denied a petition for writ of mandamus by a man held in civil contempt for failing to comply with an asset turnover order after the SEC sued him for securities fraud in connection with his EB-5 regional center.

The three-judge panel said that the district court’s decision to issue the turnover order for Marco Ramirez — who ran the company USA Now, a regional center for the EB-5 program, is supported by clear and convincing evidence.

Ramirez allegedly used the business to solicit money from potential candidates and promised to hold the investments in escrow until the visas were approved, but allegedly spent the money or transferred it to his other businesses.

The district court had granted the SEC’s bid for a receivership order, which required Ramirez to provide an accounting and turn over all of his assets to a receiver. When the receiver’s accountant discovered that Ramirez issued a $500,000 refund check to an investor even though there was no record of the investor’s deposit, the district court filed the turnover order requiring him to return the $500,000 to the receiver because it was part of the estate.

The SEC is represented by Brian Theophilus James.

The Ireecos are represented by Barton Sacher and Joseph Sacher of Sacher Zelman Hartman Paul Beiley & Sacher.

The case is In the Matter of Ireeco LLC and Ireeco Ltd., administrative proceeding 3-16647, in the U.S. Securities and Exchange Commission.

http://www.law360.com/articles/671527

Mentions

• U.S. Citizenship and Immigration Services
• UNITED STATES SECURITIES AND EXCHANGE COMMISSION
• Ireeco Limited

Litigation Cases

• UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Ireeco Limited

States

• Florida