The U.S. Securities and Exchange Commission sued a Chicago man over claims he fraudulently raised more than $145 million primarily from Chinese investors by promising that their investments would provide a pathway to U.S. citizenship.
Anshoo R. Sethi, 29, over the past 18 months duped more than 250 investors into believing that backing his project to build a hotel would give them access to the EB-5 Immigrant Investor Pilot Program, the SEC said in a Feb. 6 complaint unsealed today at U.S. District Court in Illinois. Certain investors who create or preserve at least 10 jobs for U.S. workers can get U.S. residency permits through the program.
Sethi falsely told investors that his companies had acquired all the necessary building permits and that several major hotel chains had signed onto the project to construct the “World’s First Zero Carbon Emission Platinum LEED certified” hotel and conference center near Chicago’s O’Hare International Airport, the SEC said. Meanwhile, Sethi and his companies have spent more than 90% of the $11 million in administrative fees collected from investors, according to the complaint.
“Sethi orchestrated an elaborate scheme and exploited these investors’ dream of earning legal U.S. residence along with a positive return on their investment in a project that was not nearly the done deal he portrayed,” Stephen Cohen, associate director of the SEC’s enforcement division, said in a statement.
A phone call to a number listed for Sethi was not immediately returned.
The Chicago Tribune reported last year that Illinois Governor Pat Quinn’s administration had originally supported Sethi’s project. In January 2012, however, state officials demanded that Sethi remove Quinn’s image and the state’s seal from materials he used to solicit investors, the Tribune reported.