The Securities and Exchange Commission (SEC) has sued an EB-5 lawyer in California for charging his clients fees on EB-5 transactions and then also collecting fees from regional centers for placing the half-million dollar investments with the centers, without disclosing this to the clients. The precise charge is that Steve Qi, who has a law office in Alhambra, Calif., "acted as unregistered brokers and engaged in fraud." The civil complaint in this case called for "Defendants to disgorge all ill-gotten gains from their illegal conduct."
The document states:
The Defendants received at least $1,667,248 ... in transaction based compensation from at least six Regional Centers. ... Of this amount $1,032,248 was paid to Defendants' nominees after Qi was told as early as July 2011 ... by one Regional Center that the securities law required Qi to register with the SEC as a broker-dealer to lawfully receive transaction based compensation for his efforts.
Elsewhere it is noted that 61 clients were involved; given the predominance of Chinese investors in this program, presumably many, if not all, of Qi's clients were from that nation.
I have heard, generally, of this kind of double-dipping, but do not recall seeing a court case on this practice.
This may be a coincidence of minimal significance, but Qi, who secured his college education somewhere overseas, is noted in the California bar's listing of attorneys as being a graduate of Western State University College of Law in Fullerton, Calif. It is one of the country's handful of for-profit law schools, and ranks near the bottom of national law school rankings.
That law school also produced Emilio Francisco, another California lawyer involved in another EB-5-based fraud case, as we reported about a year ago.
The file on the civil case against Qi, who is fighting it in court, can be seen at PACER 2:17-cv-08856-CJC-JC.