Flushing couple accused of scamming Chinese investors: SEC
TIMESLEDGER | QNS.COM |OCT. 22 - OCT. 28, 2021 9
BY BILL PARRY
Federal regulators have accused
a Flushing couple of committing security
fraud in connection with two
real estate projects in Queens.
The Security and Exchange Commission
(SEC) filed a complaint in
Brooklyn federal court alleging
that luxury developer Richard Xia
and his company Fleet New York
Metropolitan Regional Center LLC
had scammed hundreds of Chinese
nationals out of more than $229 million
through EB-5 offerings to fund
the Eastern Mirage project in Flushing
and the Eastern Emerald project
in Corona.
EB5 Affiliate Network (EB5AN)
helps foreign investors obtain U.S.
permanent residency, or green
cards, through investments in U.S.
real estate development projects
within the guidelines of the EB-5
Immigrant Investor Program, a
U.S. government effort that encourages
new investment in job-creating
projects.
The SEC’s complaint alleges that
from 2010 through late 2017, Xia,
through Fleet, fraudulently raised
more than a quarter-billion dollars
from more than 450 investors
for the two real estate development
projects.
According to the complaint, the
offering materials made misrepresentations
regarding the sources of
financing for the projects, the experience
of the project’s development
and construction team, the scope of
the Eastern Emerald project, and the
existence of lease agreements among
several entities that Xia owns and
controls. Additionally, Xia allegedly
misappropriated approximately $17
million in Eastern Mirage investor
funds, and at least $11.8 million in
Eastern Emerald investor funds.
The SEC’s complaint, filed in federal
district court in Brooklyn on
Sept. 28, charges Xia and Fleet with
violating the anti-fraud provisions
of the federal securities laws. The
complaint seeks, among other relief,
a permanent injunction, disgorgement,
prejudgment interest, civil
penalties, an asset freeze and the
appointment of a monitor. The complaint
also names Xia’s wife, Julia
Yue, as a relief defendant and seeks
disgorgement and prejudgment interest
from her.
The couple allegedly solicited
$500,000 from each investor in addition
to a $50,000 processing fee, according
to the SEC complaint.
“Developers offering securities
in connection with the E-5 program
have the responsibility to be truthful
to their investors,” said Richard
Best, director of the SEC’s New York
Regional Office. “As we allege in
our complaint, Xia misappropriated
millions of investor funds and misled
investors about the financing
for the projects and the experience
of the projects’ development and
construction teams.”
The Eastern Mirage Project, located
at 42-31 Union St. in Flushing,
was scheduled for completion
in 2013 but remains “an unfinished
and empty glass tower,” according
to the complaint.
The Eastern Emerald Project,
located at 112-21 Northern Blvd. in
Corona, has barely gotten underway
and the complaint describes the site
as “a largely vacant dirt hole surrounded
by a concrete wall.” The
real estate company previously announced
it would be complete by
2024.
Reach reporter Bill Parry by email
at bparry@schnepsmedia.com
or by phone at (718) 260–4538.
A Flushing couple behind two Queens development projects, Eastern Emerald and
Eastern Mirage, are accused by the feds of scamming Chinese investors.
Photos courtesy of Fleet Financial Group
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