By Monica Sanchez
On Wednesday Oct. 4, 2017, an Arcadia couple had to go to a court hearing after being accused of stealing $12 million from investors through their various businesses.
According to the SEC (Securities and Exchange Commission) complaint, “The Chens offered and sold securities in two projects under the federal EB-5 immigration program administered by the United States Citizenship and Immigration Services (“USCIS”), which allows foreign investors to apply for green cards as long as their investments meet certain criteria under the program. Home Paradise Investment Center LLC (“Home Paradise”), an entity controlled by Edward Chen, is the ‘regional center’ designated by USCIS to sponsor these EB-5 offerings.”
The U.S. Securities and Exchange Commission published a litigation release about the couple’s criminal activities. The couple in question, Edward Chen, age 49, and Jean Chen, age 48, have multiple aliases. Edward who is also known as Jianqiao Chen, Jian Qiao Chen, and Jian Chen, and Jean who sometimes goes by Jing Jiang and Jean Jiang, collected “$22.5 million from 45 investors in China for the development of an interior design center in Ontario, California, and a residential condominium building in Los Angeles. The offerings utilized the federal EB-5 program that provides a method for foreign investors to obtain visas by investing in projects that create or preserve at least 10 jobs for U.S. workers.”
The Chens took advantage of investors by claiming that they were creating 345 jobs. However, the investors claimed that the Chens only put together an “undecorated, half-empty warehouse space with one apparent employee.” Instead, the Chens misappropriated $12 million of investor funds by issuing cashier’s checks to Jean Chen.
The Arcadia Police Department was unable to release arrest information on the Chens or reveal if they are on house arrest, but federal investigators have frozen the couple’s accounts after receiving complaints from investors.
Investors’ complaints also highlighted what the misappropriated funds were used for, such as diverting “millions of dollars to fund the Chens’ purchase of residential real estate” and transferring “investor money to Chen-controlled entities.”
The Chens’ false, misleading statements and omissions have led them to arrive at their Oct. 4 court hearing. The fact that “investment funds were being used for purposes other than those disclosed in the offering materials would have been important to investors, as the misuse and misappropriation of investor funds could jeopardize investors’ expected returns on their investment, as well as their expected immigration benefits.”
A restraining order has already been issued against all of the Chen-controlled entities: Home Paradise Investment Center LLC, GH Investment LP, GH Design Group LLC, Golden Galaxy LP, and Mega Home LLC. It is unclear as of yet what the ultimate fate of these organizations might be.
Further information about this case and the Oct. 4 court hearing will be released once it is available. If you have any information about this case, please contact the Arcadia Police Department at (626) 574-5150 or submit information to the U.S. Securities and Exchange Commission at https://www.sec.gov/oiea/QuestionsAndComments.html.