Ever the cop on the EB-5 beat, the Securities and Exchange Commission has levied a $1 million fine on one of the biggest and longest-established entities in the EB-5 business — American Life, Inc., and its president, Henry G. Liebman.
Liebman was also fined $240,000, according to the SEC document that is the record of an agreement between the federal agency and American Life and its leader. This is a civil penalty and the civil version of a plea deal.
It should be stated immediately that while Seattle-based American Life has agreed to a charge of misbehavior, there is no suggestion of investors' moneys being stolen, as so often happens in other EB-5 cases. In this instance, as I understand it, the corporation handled its relationships with its middlemen in such a way as to cause them (mostly immigration lawyers) to violate SEC rules about the registration of broker-dealers. This is how the SEC document reads:
Respondents paid transaction-based compensation to unregistered broker-dealers, causing the broker-dealers to violate Section 15(a)(1) of the Exchange Act. Those unregistered broker-dealers, who were mostly immigration attorneys, represented individuals seeking U.S. residency through the Immigrant Investor Program and recommended and helped effect the purchases of securities offered by American Life. For a period of time, Respondents paid transaction-based compensation to these unregistered broker-dealers for each investment that they facilitated.
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