The federal government has charged a Northern California law firm with running a fraudulent EB-5 scheme that generated more than $10 million in commission fees from foreign investors.
The Securities and Exchange Commission’s complaint alleges that several people connected with the Law Offices of Jean D. Chen acted in concert to swindle foreign investors — who contribute $500,000 to a project — seeking permanent residence in the country. Named in the complaint were the law firm’s owner, Jean Danhong Chen; as well as her husband, Tony Jianyun Ye; and personal friend, Kuansheng Chen.
The firm, based in San Jose, focuses on immigration and naturalization law. It claims to have secured more than 10,000 visa and green card approvals across 50 states.
According to the complaint, Chen and Ye routinely advised their clients to invest in an EB-5 regional center that the couple secretly operated.. Another individual, Kai Hao Robinson, posed as the manager.
The couple also allegedly scrubbed any records that would implicate them in the scheme after learning about the SEC investigation, according to the government’s statement.
The complaint, filed in federal district court, seeks permanent injunctions, civil penalties and the appointment of a receiver.
Chen did not immediately respond to requests for comment.
The popular EB-5 program allows foreign investors to obtain a green card if they invest at least $500,000 in a project and create at least 10 jobs. It’s been especially popular among Chinese investors — 75 percent of EB-5 visas were awarded to Chinese citizens in 2017.
But the program has come under increased scrutiny in recent years as concerns regarding fraud and abuse have mounted.
Earlier this year, three Chinese investors sued a California family for allegedly stealing more than $1.5 million through an EB-5 scheme. Two owners of a Vermont ski lodge were also charged with misusing more than $200 million of EB-5 investor money.
The government again extended the program through Dec. 7, though it’s unclear what will happen after that.