Lawsuit alleging EB-5 scam at Metropolis has been dropped

A fundraising entity had claimed the lawyer attempted to take over stewardship of the program

Los Angeles /
Apr.April 12, 2018 02:29 PM
Metropolis project in Downtown Los Angeles (Credit: Metropolis LA)

A federal lawsuit filed against a Los Angeles attorney accusing him of running an EB-5 scam at the Metropolis megaproject has been dropped.

LA Metropolis Condo I, a fundraising entity involved in Greenland USA’s mixed-use project in Downtown Los Angeles, dropped the suit against the lawyer, James Krug, and his one-person firm.

LA Metropolis Condo I filed the suit last month, and court records show it was dismissed by the plaintiff April 3.

The suit had alleged that Krug and his firm convinced EB-5 investors and financial services firm A&J Capital that he had taken over management of the investor-visa program at the condo development. In a letter sent to A&J Capital on March 14, Krug’s firm allegedy claimed A&J Capital had been “terminated” from the project as a result of an alleged membership vote. The letter also ordered A&J Capital to halt its operations on the project, according to the lawsuit.

Alhambra-based A&J Capital, however, had not been terminated and is still managing the federal EB-5 program, the plaintiff claimed.

Greenland USA, which was not a party to the lawsuit, declined to comment. Krug also declined to comment. The law firm representing the plaintiff, Holland & Knight, did not respond to requests for comment.

Greenland USA, the U.S. arm of the China-based Greenland Group, is developing the 3.5 million-square-foot project, which includes three massive condominium towers, 70,000 square feet of retail and a 350-key hotel. Its 38-story luxury Tower 1 was completed in April as part of “Phase 1.” One of the condo towers and the hotel component of the project hit the market earlier this year.

Under the EB-5 program, foreign investors pour money into job-creating U.S. projects in exchange for a green card. In recent years, it has become one of the most popular fundraising methods for U.S. developers, who have raised billions through it. The program was recently extended through September.

LA Metropolis Condo I was created for the purpose of raising immigrant capital — $100 million — for the development of that project’s Phase 1, according to the lawsuit.

The capital would then be allocated to an entity named Greenland LA Metropolis Development I, LLC.


Related Articles

arrow_forward_ios
Jose Huizar (Getty)
Former LA city councilman José Huizar to plead guilty to bribery and tax evasion
Former LA city councilman José Huizar to plead guilty to bribery and tax evasion
ELK's Evan Kasper with 1410 North Highland Avenue (ELK Development, Google Maps, Getty)
Developer owes $6M to contractor for Hollywood apartment project: lawsuit
Developer owes $6M to contractor for Hollywood apartment project: lawsuit
Michael Rosenfeld, Glorya Kaufman, Harvey Bookstein and 2050 Avenue of the Stars (Getty, Linkedin, Google Maps, USC Glorya Kaufman School of Dance)
These savvy investors are set to lose big in the Century Plaza foreclosure
These savvy investors are set to lose big in the Century Plaza foreclosure
Stefanie Pollack and Dennis Chernov
Top agent Chernov accused of squeezing partner out of deal
Top agent Chernov accused of squeezing partner out of deal
Clockwise from left: Erewhon Studio City, The One, Nile Niami,  Chris Pearson, Erewhon CEO Tony Antoci and Midwood CEO John Usdan (Getty; Illustration by The Real Deal)
SoCal’s wildest real estate lawsuits of 2022
SoCal’s wildest real estate lawsuits of 2022
From left: Corcoran's Steve Belluomini, Pam Liebman, Michael Mahon and Randall Kostick (Corcoran, Getty)
Corcoran taps new NorCal franchise after Global Living fiasco
Corcoran taps new NorCal franchise after Global Living fiasco
Simon and David Reuben, DigitalBridge's Marc Ganzi and Century Plaza in Century City (Getty, Ganzi by Sonya Revell, Minnaert, CC BY-SA 3.0, via Wikimedia Commons)
Reuben Brothers delay foreclosure on Century Plaza
Reuben Brothers delay foreclosure on Century Plaza
From left: DirecTV's Bill Morrow and Kilroy Realty's John Kilroy with 2250 East Imperial Highway
Kilroy settles with AT&T over DirecTV HQ in El Segundo
Kilroy settles with AT&T over DirecTV HQ in El Segundo
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...