Close up of United States Visa.

California Couple Faces Contempt Over EB-5 Securities Fraud Claims

A couple involved in securities fraud relating to an EB-5 immigrant investor program for a cancer treatment center was ordered by a California federal judge to explain why they hadn’t followed the court’s order to repay nearly $27 million to investors or face contempt charges.

In September 2016, the U.S. Securities & Exchange Commission (SEC) won its bid to get husband and wife Charles Liu and Xin Wang to turn over money raised from at least 50 investors despite their claims that they could not come up with the money. Liu and Wang raised the money from proposed investors to construct a cancer treatment center in 2014 – 18 months later no construction had taken place at the designated site.

The couple was ordered to show cause as to why they shouldn’t be held in civil contempt after failing to comply with orders to answer questions regarding their finances and failing to respond to the SEC’s interrogatories. Instead of using investors’ money for its stated purpose, Liu was accused of transferring $11 million to three marketing firms in China, including one where he is the CEO and chairman. An additional $7 million went into his and Wang’s personal accounts. According to the SEC, Liu also told Chinese press that he’d pocketed some of the money.

Liu and Wang solicited investments through the government’s EB-5 program, in which investors invest at least $500,000 in a commercial enterprise. As part of the program, investors become eligible for a two-year work and residency visa and the potential for permanent residency in the United States. We reported about this EB-5 Securities Fraud earlier here.

The couple’s funds were frozen by the court in June, along with those of three corporate defendants, all of whom were a part of the failed cancer treatment project: Beverly Proton Center LLC, Pacific Proton Therapy Regional Center LLC and the Pacific Proton EB 5 Fund LLC. The SEC is seeking to hold these companies in contempt for failing to allow access to their corporate books.

Call a Los Angeles Securities Fraud Attorney Today

If you invested with Charles Liu or Xin Wang or think you may be involved with a case of EB-5 Securities Fraud, believing that your investment would help secure you a visa to the U.S., you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.