Chinese investors defrauded of US$150m in US visa scam

PUBLISHED : Tuesday, 12 February, 2013, 3:53pm
UPDATED : Tuesday, 12 February, 2013, 5:32pm

More than 200 mainland Chinese have had their dreams of living in American dashed after an immigration investment programme they put money into turned out to be fake.

Anshoo Sethi, a 29-year-old Illinois resident, is alleged to have conned 250 investors, most of them Chinese, out of more than US$156 million by convincing them they were participating in an immigration investment programme to acquire US residency.

Sethi convinced each of the victims to purchase US$500,000 worth of securities from two companies he created. He also persuaded them to wire an additional US$41,500 “administrative fee” in order to apply for an EB-5 visa.

The EB-5 Immigrant Investor Pilot Programme offers foreign nationals the opportunity to obtain permanent US residency by investing US$500000 in job-creation projects. Successful applicants also have a good chance of obtaining US citizenship after five years.

But the Securities and Exchange Commission alleges Sethi did not acquire the necessary permits and provided falsified documents to US Immigration Services.

“Sethi orchestrated an elaborate scheme and exploited these investors’ dream of earning legal US residence,” said Stephen Cohen, associate director of the SEC’s enforcement division.

Sethi’s scheme has been brought to a halt, but the SEC said 90 per cent of the US$11 million in administrative fees collected from investors had already been spent. Sethi transfered US$2.5 million of the funds into his personal bank account in Hong Kong. 

The SEC said it had obtained an emergency court order to protect the remaining US$145 million in investor assets.

The number of EB-5 visas issued has surged in the past two years, reaching an historical high of 7,641 in the 2012 fiscal year, a fourfold increase since 2010. Mainland-born Chinese account for 80 per cent of successful applicants, according to the Association to Invest in USA.