Court records show that Caffe Primo, which in October 2015 moved into the lower State Street space formerly occupied by the Pierre LaFond Wine Bistro, closed this January immediately after a federal judge froze the assets of CEO Emilio Francisco amid fraud charges filed by theSecurities and Exchange Commission. The judge cited “extensive, thorough and compelling evidence” presented by the SEC that Francisco improperly spent at least $9.5 million of investor money on a yacht, a yacht-club membership, his other businesses, and credit cards belonging to him, his brother, and his daughter. In addition to the Santa Barbara restaurant, at least three other Southern California locations operated by the Los Angeles–based Caffe Primo chain have closed as a result of the charges.
According to the SEC, Francisco ?— a Newport Beach attorney who runs investment firm PDC Capital ?— raised more than $72 million between 2013 and last year from investors looking to take part in the federal EB-5 visa program, which offers permanent residency to foreign entrepreneurs (along with their spouses and unmarried children under 21) who invest in a commercial U.S. enterprise and create at least 10 full-time U.S. jobs. More than 100 investors, most of them Chinese citizens, each gave PDC Capital $500,000 that Francisco promised would be used to build assisted-living facilities and open new Caffe Primo locations. Instead, authorities say, Francisco used a large portion of the funds to support a lavish lifestyle. Attorneys for Francisco and PDC did not return calls and emails seeking comment.
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