Judge halts convention center project after lawsuit accuses developer of bilking Chinese investors

CHICAGO — A project to build a convention center near O’Hare International Airport has been stopped by a federal judge after a government lawsuit accused the developer of trying to bilk Chinese investors out of millions of dollars.

Anshoo Sethi’s plan to attract foreign investors for his Chicago Convention Center project was detailed in a Chicago Tribune article last July that laid out the promise and problems of the rapidly growing EB-5 visa program.

In a lawsuit filed by the Securities and Exchange Commission earlier this month, Sethi is accused of using false documents to pump up his project. The lawsuit seeks to force Sethi to return $145 million he collected from about 250 investors, most of them Chinese. The SEC also says Sethi wrongfully transferred $2.5 million from investors into a personal bank account in Hong Kong.

Sethi envisioned the convention center on land where his family’s struggling, run-down hotel once stood on West Higgins Road. The site remains vacant and littered with debris after a ground-breaking ceremony last year.

As part of the SEC lawsuit, filed in Chicago on Feb. 6 and unsealed last week, a federal judge has ordered that Sethi’s project be temporarily stopped. The judge also ordered that Sethi’s assets be seized and that investors’ money that left the U.S. be returned to this country.

If the project unravels, it’s likely that Sethi’s investors would lose at least some of their money and, for now, their hopes of making it into the U.S. through the EB-5 program, financial analysts familiar with the program said.

“People are trying to figure out how they can get their money back,” said Punyu Ho, a Chicago-based financial analyst with Chinese clients who have invested money in other EB-5 projects.