The United States Citizenship and Immigration Service (“USCIS”) administers the EB-5 visa program for immigrant investors seeking permanent residency in the United States. To receive permanent residency, immigrant investors must invest at least $500,000 in a Target Employment Area (“TEA”) and created 10 full-time jobs for United Stated workers. This program allows investors to designate entities as “regional centers” inside a TEA. In 2006, Lee applied to designate one of the Entity Defendants as a regional center. The Entity Defendants raised $11,455,000 in investment contracts from immigrant investors for the construction of an ethanol plant.
The SEC filed a complaint against defendants, claiming the Defendants violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10-5b. The complaint alleged the Entity Defendants never constructed the plant, and used a majority of the money raised by the immigrant investors for other purposes.
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