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Investors file suit against San Gabriel Valley duo accused of $50M EB-5 scam

Federal prosecutors also brought charges against the father-daughter team
May 30, 2017 11:30AM

Sen. Chuck Grassley (Credit: Getty)

Four investors that bought into an alleged $50 million EB-5 scam in the San Gabriel Valley are now suing the father-daughter duo behind the scheme.

Yeqing Xia, Rui Zhang, Song Yao Li, and Ting Li — all Chinese nationals — filed suit in California state court, claiming that Victoria and Tat Chan conned them into forking over more than $500,000 each, not including attorneys’ fees, to qualify for the EB-5 visa program, which offers green cards to foreign citizens who invest in American businesses.

The four plaintiffs, who were among more than 100 Chinese nationals allegedly solicited by the Chans, will see their conditional green card status expire in November, their Diamond Bar-based attorney, Jing Wang, told Law360. They are seeking to maintain their status in the EB-5 program by reinvesting in another project, she said.

Meanwhile, federal prosecutors filed nine property forfeiture actions last week against the Chans. Authorities allege the duo stole millions of dollars from investors to spend on personal property purchases.

The government is accusing them of redirecting the funds from their business, the California Investment Immigration Fund LLC (CIIF), for personal gain. Federal prosecutors claim that the nine properties involved in the forfeiture actions total more than $30 million and include a commercial property in the City of Industry worth over $3 million and a parcel of land in Rancho Cucamonga worth $7.7 million. according to Law360.

Sen. Chuck Grassley of Iowa said in April that he was inquiring into the activities of CIIF and had requested more information from the Department of Homeland Security. The Republican lawmaker is among proponents of EB-5 reform, who argue that the federal program far too easily allows dirty money to flow into the U.S. without oversight.

“Rather than legitimately investing the funds into American businesses, CIIF either refunded the funds to the EB-5 investors while the investors’ EB-5 petitions were pending, in direct violation of the EB-5 program, or stole millions of dollars to use for personal expenditures, including buying million-dollar homes,” prosecutors said in court filings.

Last month, federal agencies raided the homes and office of the Chans, whose list of investors included fugitives on China’s 100 most wanted list.

Victoria Chan ran the American operations of CIIF out of the San Gabriel Hilton Hotel while her father Tat led the Chinese side in Guangzhou, a major city in southern China, the FBI affadavit claims.

CIIF had at least 14 affiliating companies and service providers, the biggest of which the Chans dubbed the Harris Group USAThe Real Deal reported. It marketed itself to investors as their “only opportunity to get rich in America.” [Law360]