The SEC last week brought charges against an immigration lawyer and her husband for allegedly engaging in a scheme to defraud that reaped millions in undisclosed compensation sourced from foreign national investors seeking permanent US residency via the EB-5 Immigration Investor Program.
The complaint filed by the US Securities and Exchange Commission claims that Jean Danhong Chen and her husband, Tony Jianyun Ye, with the material assistance of a friend, Kuansheng Chen, generated in excess of $10 million in undisclosed commissions by offering and selling EB-5 securities to Chen’s legal clients. The SEC’s complaint further alleges that the husband and wife duo used a personal friend as a figurehead to secretly obtain and run an EB-5 regional center, and subsequently recommended that clients invest in the center’s projects without disclosing their ownership interests.
In a more sinister allegation, the SEC contends that once the husband and wife defendants learned of the SEC investigation, they backdated documents and “scrubbed” other business papers to hide their true role in the fraudulent securities scheme.
The SEC’s civil enforcement action contends that defendants violated the antifraud provisions of the federal securities laws, and that certain defendants violated the securities registration provisions. The SEC is seeking permanent injunctions, the return of ill-gotten gains (known as disgorgement), prejudgment interest, civil penalties, and the appointment of a receiver.
While defendants may face steep consequences if the SEC’s allegations are proven to be true, they may face even more serious ramifications in the event they backdated documents and “scrubbed” business records with the intention to hide their true roles in the purported fraudulent scheme after learning of the SEC’s investigation. Such conduct may constitute obstruction of justice and could potentially cause the SEC to refer the matter to the Department of Justice for criminal prosecution. If so, it would be defendants’ liberty, as opposed to just their dollars, at stake. It would also be yet another example of how the cover-up is often times worse than the underlying alleged crime.
SEC defense lawyer David Chase is the principal of his SEC defense law firm, David R. Chase, P.A., located in Fort Lauderdale, Florida. Mr. Chase, an SEC defense lawyer and former SEC enforcement attorney, defends individuals in SEC and FINRA investigations and enforcement actions throughout the country.
If you are under SEC investigation in connection with an EB-5 fraud offering and need a SEC defense lawyer call SEC defense attorney David Chase for a confidential, no-cost initial consultation at: (800) 760-0912, or you may contact Mr. Chase at: email@example.com.