In coordinated criminal and civil actions, federal prosecutors obtained an indictment and the Securities and Exchange Commission filed a civil complaint against a Los Angeles-based immigration attorney who allegedly ran an investment scheme that defrauded foreign investors seeking permanent residency status in the United States through the EB-5 Immigrant Investor Program.
The indictment and the SEC’s lawsuit alleges that Justin Moongyu Lee raised millions of dollars from dozens of investors—mainly in Korea and China—seeking to participate in the EB-5 program, which provides immigrants an opportunity to obtain permanent residency status by investing in a domestic project to create or preserve jobs for domestic workers.
Both cases allege that Lee—a 57-year-old lawyer who most recently resided in the Hancock Park section of Los Angeles—informed investors that they would be eligible to obtain a “Green Card” if they invested in an ethanol production facility. Instead of using the victims’ money for the biofuel project, Lee allegedly misappropriated the money for his own use. The ethanol plant was never built and the promised jobs were never created, and the foreign nationals lost their opportunity to obtain permanent residency.
A federal grand jury in Santa Ana late this morning returned a nine-count indictment that alleges Lee took approximately $47 million from 94 foreign investors. The indictment alleges that Lee used advertisements in foreign newspapers and other means to solicit Korean and Chinese nationals to invest $500,000 each, plus another $40,000 for administrative and legal fees. Lee guaranteed small annual returns on the investments, as well as “Green Cards” for the foreign nationals. But, according to the indictment, Lee did not make the investments in purported biofuel production facilities and he submitted bogus paperwork to U.S. Citizenship and Immigration Services, which administers the EB-5 program.
Lee is currently in custody in Korea on charges related to this alleged scheme.
Each of the nine wire fraud charges in the indictment carries a statutory maximum penalty of 20 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The SEC’s civil case—which names Lee; his wife, Rebecca Taewon Lee; and Thomas Edward Kent—alleges that the trio raised nearly $11.5 million from two dozen investors seeking to participate in the EB-5 program. According to the SEC’s complaint, the Lees and Kent concealed their failure to generate the jobs required by the EB-5 program by submitting false documents to the USCIS. The Lees allegedly misused several million dollars raised from the ethanol plant investors for other purposes, such as financing an iron ore project in the Philippines, an allegation that is mirrored in the indictment.
The SEC’s complaint, which was filed in United States District Court in Los Angeles, charges the Lees, Kent, and five companies founded and controlled by Justin Lee. The lawsuit seeks disgorgement, prejudgment interest and penalties, along with permanent injunctions (for further information on the SEC case, see: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542843452).
The criminal investigation into Lee was conducted by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement and IRS—Criminal Investigation.
The State Bar of California has taken disciplinary action against Lee because of an alleged “major misappropriation of client funds,” and he is now longer allowed to practice law (see: http://members.calbar.ca.gov/fal/Member/Detail/187507).