CHICAGO – An Illinois man has been accused of scamming hundreds of Chinese investors out of millions of dollars, the Securities and Exchange Commission announced Friday.
The SEC alleges Anshoo R. Sethi, 29, created a company that claimed investors would be financing construction of the "World's First Zero Carbon Emission Platinum LEED certified" hotel and conference center near Chicago's O'Hare International Airport. The agency alleges Sethi fraudulently sold more $145 million in securities and $11 million in fees to more than 250 investors, most of them from China.
Sethi and his companies told investors they had acquired all the necessary building permits and had signed several major hotel chains onto the project, the SEC alleges.
The SEC complaint, filed in U.S. District Court in Chicago, alleges Sethi submitted false claims about the project to U.S. Citizenship and Immigration Services. The agency administers a program that enables foreign investors to possibly qualify for a green card if they invest $1 million in a project that creates or preserves at least 10 jobs for U.S. workers, excluding the investor and his or her immediate family.
Sethi and his companies used the lure of a pathway to U.S. citizenship to convince investors to wire a minimum of $500,000 each plus a $41,500 "administrative fee" to U.S. bank accounts, according to the charges.
The SEC's complaint alleges Sethi and his companies made a number of misrepresentations to dupe investors, including falsely stating construction would begin in summer 2012 and occupancy of the first tower would occur in spring 2013. They also contend Sethi and his companies have spent more than 90 percent of the administrative fees collected from investors despite their promise to return the money if their visa applications are denied. More than $2.5 million of these funds were directed to Sethi's personal bank account in Hong Kong.
The SEC says it has frozen the assets of Sethi. There was no answer at telephone listings for Sethi in Chicago. It isn't known if he has obtained legal counsel.
"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," said SEC associate director of enforcement Stephen L. Cohen. "The good news is that working closely with USCIS, we intervened early and stopped him from getting very far, and the asset freeze preserves nearly all of the money invested."