Questions surround $50M in EB-5 investments tied to former INS building: lawsuit

A Chinese investor is suing over a stalled mixed-use redevelopment project in Miami’s Upper Eastside neighborhood that generated more than $50 million from 100 EB-5 investors.

Chun Liu, the Chinese investor living in Portland, Oregon, is suing a company that was set up to distribute the EB-5 funds for the redevelopment of the former U.S. Immigration and Naturalization Service headquarters at 7880 Biscayne Boulevard in Miami.

Florida Fullview Immigration Building, led by Leo Wu, partially demolished the old building and planned to replace it with Triton Center, a project that would entail a hotel, apartments, 25,000 square feet of commercial space and approximately 585 parking spaces.

The defendants are an affiliate of Florida Fullview and the affiliate’s manager Wai Kin Benny Lam. According to the lawsuit, filed in Miami-Dade Circuit Court on Oct. 27, the affiliate was supposed to issue a mortgage to Florida Fullview meant to secure the investors’ funds.

But Liu alleges he could find no record of a loan filed with the Miami-Dade Clerk of Courts. Liu also claims that Florida Fullview and its managers have kept investors in the dark about Triton Center’s viability and refused to turn over records, including financial statements.

“The funding entity appears to have misled its investors,” said Liu’s attorney Alexis Read. “They have been uncooperative and stonewalling every effort to get basic records and financial data. My client is going to pursue all his rights and remedies to uncover the truth and find out what is really going on with this project.”

Attorneys representing Lam and the affiliate, Florida Fullview Immigration Building Funding LLC, did not respond to requests for comment.

The EB-5 program grants foreign investors and their immediate family members permanent U.S. residency if they invest in real estate projects or businesses that create 10 full-time jobs. In November of last year, the federal government enacted new rules for the program, including raising the minimum amount of money an investor has to put in from $500,000 to $900,000. Investor demand in the EB-5 program has been tailing off due to visa backlogs, fraud and misuse.

According to the lawsuit, Liu invested $500,000 and paid a $50,000 administrative fee in 2013 to obtain a 1 percent interest in the Triton Center project. He was among 100 investors who put in more than $50 million toward the project, the lawsuit states.

A review of Miami-Dade County public records reflects that there is no mortgage loan recorded showing the funding entity as the lender and Florida Fullview as the borrower, the lawsuit alleges. But the property is encumbered by several other multimillion-dollar mortgages, including a $26 million loan the developer obtained from an affiliate of Madison Realty Capital.

The lawsuit alleges that Florida Fullview has never provided any meaningful financial information or data to Liu since he placed his money in the project seven years ago. Liu also alleges that the status of his permanent U.S. residency is uncertain because he is unaware if any meaningful job creation has occurred in connection with the Triton Center project.

“We have seen no proof,” Read said. “I don’t have bank statements and I don’t have payroll records that unequivocally demonstrate evidence [that the project is viable]. My client and his family live in Portland where his son is in college. He has a lot to lose, including his residency.”