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Developer Misappropriates Immigrants Who Invested

Posted by on Nov 23, 2015 in Misappropriate | Comments Off on Developer Misappropriates Immigrants Who Invested

On Tuesday an attorney for a federal regulator alleged that the developer LobsangDargey had misappropriated $46 million of immigrant investment funds. These people were investing in the downtown Seattle Potala Tower. As a result, the court has frozen the assets of Mr. Dargey and his company Path America.

usan LaMarca, the SEC attorney stated to U.S. District Judge James Robart that after investigating this case, $63 million had been invested by immigrant investors. However, only $17 million had been received for the Seattle Potala Tower and used in the manner it was intended to be used. It is alleged that the rest of these funds were redirected to LobsangDargey’s other companies and other activities that had nothing to do with the 40-story Tower.

Judge Refuses LobsangDargey’s Request to Unfreeze Bank Accounts
Dargey requested that his bank accounts for his company Path America and its related companies should be unfrozen. However, this was denied by U.S. District Judge James Robart. Judge Robart justified this bank account freeze by stating that “There is a reasonable likelihood that violations of federal securities laws will continue.”

Dargey’s assets were frozen on the same day the action was taken by the SEC. Since then, certain, approved payments have been allowed and some Chinese investors have been given refunds. Susan LaMarca believes the current freezing of assets will prevent the “massive, massive misuse of investor funds” in the future. Tuesday’s hearing will determine whether or not this freeze continues.

LobsangDargey’s Attorney Questions the Freeze LobsangDargey’s attorney, Daniel Dunne expressed his concern about the freeze. He stated that it is harming Dargey’s business and could also have negative consequences for immigrant investors who are hoping to obtain EB-5 visas.
Dunne went on to say that Dargey has not sent money out of the country to further his interests. However, this has been challenged by the SEC who allege that over $3 million in EB-5 funds have been transferred to one of Dargey’s bank accounts in Hong Kong. According to Dunne “All the money, all the assets are hiding in plain sight”.

Work has currently stopped on the Potala Tower. Daniel Dunne stated that few of the EB-5 investors want their money back, with a small number looking for a refund.  Dunne continued to question the validity of the freeze by stating that immigrant investors who invested in Dargey’s projects were not looking for refunds. They had received many of the benefits of these types of investments such as eligibility for Green Cards.

He also gave examples of successful recent investments made by Chinese real-estate firms who were dealing with Dargey and his company Path America and stated that his clients’ assets needed to be unfrozen so he could continue to operate successfully.

In response, Judge Robart said “Don’t talk to me about the expectations of investors. Talk to me about the issues the SEC has raised, compelling evidence of misappropriation of funds.”

A Friday hearing will take place and the SEC will be attempting to appoint a receiver to manage Path America and its concerns.
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