Hu & Associates Hits Back In Immigrant Investor Suit

A California law firm targeted in a fraud lawsuit came out swinging with a series of counterclaims on Thursday, claiming the suit is a misguided attempt from a Chinese national to get out of a valid investment deal.  
Hu & Associates LLC filed counterclaims for slander and libel, among other things, in the December lawsuit brought by Shoumin Zhang, who claims she was improperly persuaded to invest $500,000 with a promise of securing an immigrant visa. Zhang claims her I-526 petition was terminated in June, but she has been unable to recoup her money.

Hu & Associates said Thursday that is a “big lie.”

There is concrete evidence that Zhang, with the help of her attorney, actually withdrew the application, the firm said, while arguing its reputation had been dragged through the mud after the other side made false allegations in the media.

“This fraudulent suit was created as a strong-arm tactic so that [Zhang] can apply external pressure on all defendants in order to coerce them to release [Zhang] from a validly executed legal contract,” the firm wrote.

Earlier this month, a judge entered default judgment against the firm in the suit, based in part on an affidavit from Zhang’s attorney, which indicated Hu & Associates had failed to defend itself.

The firm has since filed a motion to set aside the judgment. In the motion, which was filed Feb. 12, the firm claims that it did file a response within the required time-frame, and that its response was served with the opposing counsel.

“The underlying case and the request for entry of default against defendants were both based on repeated suppression of key facts and nondisclosure by the plaintiff,” it wrote. “Plaintiffs counsel not only showed a blatant disregard for truth and justice, her reckless disregard in following the procedural guidelines affect the efficiency in which cases can be adjudicated.”

Attorneys for both sides did not return messages seeking comment Friday.

Zhang’s lawsuit claims that she was “fraudulently induce[d]” to buy a membership unit in “Americana One” — which is characterized as part of a regional center — for $500,000 to qualify for an EB-5 visa.

The EB-5 program offers foreign nationals green cards in exchange for investments in American projects, as long as the investment creates at least 10 jobs. Generally, the minimum investment is $1 million, but $500,000 is also enough to qualify if it's done in a rural or high-unemployment area.

The lawsuit names three Los Angeles-area companies as well as Hu & Associates, whose services Zhang used for the EB-5 visa application. Zhang claimed attorney John Hu told her the value of the project was $8 million, but she later discovered the project was worth less.

She says she then sought the return of her cash and the termination of the immigrant petition process. She claims her I-526 petition was terminated in June.

Still, the regional center’s alleged managing member, Agnes Yen, has refused to refund the full $500,000 unless Zhang agrees to use about $38,000 of it to pay legal fees to Hu, the suit claims.

Hu & Associates countered Thursday that Zhang got cold feet on the project when she realized she wouldn’t be able to substitute her daughter on the visa application. Per the terms of the investment agreement, she could exit the project and get a full refund if the application was denied, but not if it was withdrawn, the firm said.

“The reason for [Zhang’s attorney]’s actions is simple, by framing her case this way, her client has a higher chance in repudiating a valid contract,” the firm wrote in its Feb. 12 filing. “In trying to fight zealously for her client, she forgot that lies and deceits will only take you so far, and truth and justice will always prevail.”

Zhang is represented by Jason Chuan and Mary M. Sun of the Law Office of Mary Sun.

Americana One, American Franchise Regional Center LLC and Agnes Yen are represented by Jeffrey C. Chiao of the Law Offices of Jeffrey C Chiao.

Hu & Associates and John Hu are represented by Gary M.C. Wong of Hu & Associates. 
 

https://www.law360.com/articles/761315/hu-associates-hits-back-in-immigrant-investor-suit

Litigation Cases

• Shoumin Zhang vs American Franchise Regional Center