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SEC charges man in $150 million scheme to defraud Chinese investors
February 8, 2013 / 5:31 PM / 5 years ago

SEC charges man in $150 million scheme to defraud Chinese investors

(Reuters) - U.S. securities regulators charged an Illinois man with fraud and said he misled investors from China on a $150 million deal he told them would help their prospects for U.S. citizenship, according to a complaint unsealed on Friday.

Anshoo Sethi told investors their funds would buy interests in a hotel project in Chicago that had received building permits and commitments from major hotel chains, the Securities and Exchange Commission said.

But none of the hotel chains were on board with the project, and the only permits the city had provided were for preliminary efforts including a tent for a groundbreaking ceremony and a demolition permit, the commission said.

Sethi also told investors the investments would put them on the pathway for U.S. citizenship through a program that helps foreign investors qualify for green cards if they invest in certain ways in the United States.

Instead, Sethi and his Chicago-based companies provided falsified documents to the federal agency that administers the citizenship program, U.S. Citizenship and Immigration Services, the SEC said.

Sethi and his companies also allegedly spent administrative fees that were supposed to be refunded if the visa applications were rejected, and a federal court froze the remaining funds, the SEC said.

“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 that he portrayed,” SEC Associate Director of Enforcement Stephen Cohen said in a statement.

Sethi could not be immediately located for comment.

Reporting By Aruna Viswanatha; Editing by Bob Burgdorfer

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