SEC Charges Oil Company and CEO with Operating Ponzi-like Scheme Aimed at Chinese Americans and EB-5 Investors

The SEC charged Luca International Group ("Luca International") and its CEO with running a Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, many of whom were solicited as part of the EB-5 Immigrant Investor Program.

According to the SEC complaint, Luca International conducted seminars for investors at the company's offices and hotel conference rooms. The seminars targeted investors in the Chinese-American community through advertisements in Chinese-language television, radio and newspaper outlets.

The SEC alleged that Luca International "zeroed in" on Chinese citizens who sought permanent U.S. residence through the EB-5 program, which provides a way for foreign investors to obtain a green card by meeting certain U.S. investment requirements. The CEO allegedly told these investors that the loan for which the seminars raised money, and which purportedly would be used to finance job and development costs, was fully secured. However, the entity that the EB-5 investors funded was "hopelessly in debt" and, contrary to the "rosy representations" made to investors, the loan would never be repaid.

See: SEC Press Release.