EB-5 investors allege fraud in Royal Palm Beach office project

13 Chinese investors are suing an EB-5 regional center, its founder and affiliated companies

Sep.September 26, 2018 12:30 PM

9200 Belvedere Road

Yet another group of EB-5 investors is alleging it was defrauded on a South Florida EB-5 project.

Thirteen Chinese investors are suing the South Atlantic Regional Center, along with its founder, Joseph Walsh, and affiliated companies over a $6.5 million investment in an office complex in Royal Palm Beach at 9200 Belvedere Road, according to the Daily Business Review.

The investors are alleging that the regional center, Walsh, affiliates and a company called Connect Insurance misrepresented claims about the lease between the insurance company and the building’s owner. The investors allege Connect Insurance was supposed to rent the space at 9200 Belvedere Road for 10 years, but left before the lease expired and failed to create the required number of jobs under the federal program, according to the Daily Business Review.

This is at least the third development in South Florida where investors or regulators are alleging that EB-5 investors were defrauded due to false representations. The visa program allows foreign investors to gain a green card if they invest $500,000 into certain projects.

The 13 Chinese plaintiffs were granted conditional permanent residency and already have moved to the U.S., the Daily Business Review said. Most are living in California, with the others in five additional states. But the U.S. government this year denied them the second round of approval, because those petitions require proof of job creation.

The Securities and Exchange Commission recently filed fraud charges against developer Robert Matthews and Walsh for their roles in a failed hotel-condo project in Palm Beach. [Daily Business Review] – Keith Larsen

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