The U.S. Securities and Exchange Commission (SEC) recently charged a California-based attorney with defrauding investors seeking to participate in the EB-5 immigrant investor program, stealing their funds to buy a yacht and prop up his other businesses.
For some background, under the EB-5 program, foreign investors can apply to permanently live and work in the U.S. by investing money in certain projects that bring about American jobs.
The agency alleged that Emilio Francisco raised $72 million from investors in China solicited through his marketing firm PDC Capital to invest in EB-5 projects that included opening Caffe Primo restaurants, developing assisted living facilities, and renovating a production facility for environmentally friendly agriculture and cleaning products.
According to the SEC’s complaint, Francisco and PDC Capital diverted investor funds from one project to another and outright stole at least $9.6 million that was used to finance Francisco’s own businesses and luxury lifestyle.
Francisco was allegedly aware that doing so would violate federal regulations and jeopardize any visas for the foreign investors.
Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office, commented:
As alleged in our complaint, Emilio Francisco illegally enriched himself with investor money intended for specific EB-5 projects that create jobs for U.S. workers.