EB-5 investment firm fires back at former business partner over profits spat

8th Bridge Capital calls Moses Choi a "habitual fraudster" in countersuit

Jun.June 22, 2018 02:30 PM
A rendering of the Sister City Hotel at 225 Bowery in New York. (Credit: Hospitality Net)

UPDATED, 12 p.m., June 24

A Downtown Los Angeles EB-5 investment firm has fired back at allegations from a former business partner that it cut him out of business profits involving a hotel project in New York.

Young Hun Kim and 8th Bridge Capital are counter-suing Moses Choi of the Southeast Regional Center in Atlanta for $6 million, calling him a “habitual fraudster.” They filed a countersuit in U.S. District Court in Los Angeles.

In December, Choi filed a suit claiming that between 2015 and 2017, Kim took half a million dollars from him and confidential investment contacts to help raise EB-5 funds for projects, with an understanding they were in business together.

In early 2016, Kim told Choi that he no longer wanted to partner because Choi was unresponsive and “seemingly incapable” of doing the work needed for the business, according to the countersuit. Still, he gave Choi the role of master distributor for Korea and China for the EB-5 project on behalf of a new micro-hotel project on the Lower East Side, to be named Sister City, being developed by the team behind the Ace Hotel.

He expected Choi would find 30-40 investors for the New York hotel, based on his claims to the size of his network. But he only sourced four, which Kim said he compensated him for.

The Federal EB-5 program allows non-U.S. citizens to obtain status as lawful permanent residents in exchange for investments over $1 million into projects that employ American workers, or investments of $500,000 for projects in specified geographic areas. Most investors pursue the latter.

Firms like 8th Bridge Capital facilitate investments and are often paid by developers to raise capital through the program.

Choi claimed that Kim secretly cut him out of a company they formed for the EB-5 venture, then never paid him back or paid him a cut of fees for delivering investors.

Kim now says he never formed a legal partnership with Choi, and that Choi misrepresented his capacity to raise funds, and tried to insert himself into Kim’s business to gain from his work.

The suit also contends Choi was a no-show at meetings and was “prone to violent outbursts,” once allegedly nearly hitting Kim in the head with a glass.

Kim’s suit claims that after meeting Choi at a 2015 conference in Washington, D.C., Choi met with Kim a number of times, becoming “more aggressive and adamant” that they should work together in some way. Kim said he continued to entertain the idea based on Choi’s claims of an extensive EB-5 network that could benefit Kim’s business.

Kim said in his countersuit that those claims were lies.

Correction: An earlier version incorrectly identified the hotel project in New York as being the Ace Hotel at 20 W 29th St. It is a spin-off project being named Sister City at 225 Bowery.

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