We’ve reported several times on the Chicago Convention Center scandal that was brought to a halt by the Securities and Exchange Commis- sion (SEC) in February 2013, an unprecedented action at the time. The project was orchestrated by Anshoo Sethi, who raised $147 million from Chinese investors through the EB-5 Immigrant Visa Program. Come to find out the SEC was tipped off about the suspected fraud through its whistleblower hotline, with the result being a reward to the tipster of 10 percent or $14.7 million.
An article, “Whistleblower unmasked as partners battle over $14.7 million award,” in Fortune Magazine by Peter Elkin and Mary Jones, reports that the identity of the whistleblower has been revealed as Michael Sears, a principal in a small Virginia-based firm called Global Capital Markets Advisors which manages real estate in- vestment funds, as he is now being sued by his business partner John Tung over the reward. The lawsuit was filed in Chicago in June and has since been sealed, but not before it identified the anonymous tipster.
According to the article, Tung claims that Sears welched on an agreement to share the windfall from the tip, which he says resulted from “their joint efforts and investigation.”
Tung asserts that he, Sears, and a third partner in their business, Michael Kolodner, 63, became increasingly suspicious of Sethi’s project during 2012 after learning about it while promoting an EB-5 investment of their own to Chinese investors. Tung insists that, although Sears is the one who traveled to China, the three men collaborated in investigating the Chicago project, and that Sears made “an unambiguous promise” to share in any bounty. Sears has a different story, that while traveling in China he became suspicious of the Chicago project that was being heavily promoted while he was there. He spent 30 minutes filing out the whistleblower form and later met with the SEC.
"John Tung had nothing to do with this case other than engaging in casual conversations with me and taking pictures of the investment project in Chicago, which were requested by the SEC,” Sears says in an affidavit dated July 14.
Regardless of what happens in the fight over the reward, the tip did put a halt to Sethi’s scheme and lead to the return of $147 million to the nearly 300 Chinese EB-5 investors who had put up the money in hopes of receiving green cards.