Background:
On September 27, 2021, the United States Securities and Exchange Commission (“SEC”) filed a lawsuit in the United States District Court for the Eastern District of New York (the “Court”) against Defendants Richard Xia (“Xia”) and Fleet New York Metropolitan Regional Center's (“Fleet”), and Relief Defendants Julia Yue (collectively, “Defendants”). The SEC alleged that, between 2010 and 2017, Xia and Fleet engaged in securities fraud by making false statements to EB-5 Investors from whom they raised more than $229 million to fund two real estate projects, named the Eastern Mirage Project and the Eastern Emerald Project, and to participate in the EB-5 Program administered by the United States Citizenship and Immigration Services (“USCIS”). Among other things, SEC further alleged that Xia and Fleet misrepresented to the EB-5 Investors in Eastern Mirage and Eastern Emerald: (i) that the EB-5 Investors' funds would be used only for the construction and operation of the specific project or portion of the project in which each respective Investor invested, (ii) that Xia and Fleet had obtained funding from other sources including “government bonds, loans from banks and a broker-dealer,” (iii) regarding the identity, experience and track record of the developer and contractors that were to build the projects; (iv) that the hotel portion of the Eastern Mirage Project would be affiliated with the Westin Hotel chain; (v) regarding the size of the Eastern Emerald Project and (iv) regarding conflicts of interests involving Xia and Fleet. The SEC's lawsuit also alleged that Xia and Fleet misused and misappropriated millions of dollars that belonged to the EB-5 Investors and improperly paid millions of dollars to Xia, Xia's family, and Xia's business associates. The SEC's lawsuit also named Xia's wife, Yue, as a Relief Defendant. On April 1, 2022, the SEC filed an Amended Complaint, adding Xi Verfenstein and Xinming Yu as additional Relief Defendants. The SEC's full allegations are set forth in that Amended Complaint.
This Court's Final Judgment against Defendants requires the payment of disgorgement, prejudgment interest on that disgorgement, and civil money penalties totaling $272,140,380 plus post-judgment interest to the Court Registry Investment System (“CRIS”), which is an interest-bearing escrow account held by the Court. Upon the SEC's motion, $42,500,000 of Defendants' funds that were frozen pursuant to the Court's Preliminary Injunction Order Freezing Assets, dated December 8, 2022, were to be paid to the CRIS. On August 26, 2024, the SEC filed a motion requesting that these frozen funds be turned over to the CRIS and held in an interest-bearing account. On August 28, 2024, the Court granted SEC's turnover motion. Between September 24, 2024, and September 26, 2024, three financial institutions holding frozen funds turned over a total of $42,500,000 to the CRIS.
On July 26, 2024, the Court appointed Robert W. Seiden as the Administrator of the settlement funds (the “Administrator”). On November 1, 2024, the Administrator submitted his Proposed Distribution Plan to the Eastern District Court of New York. On November 5, 2024, the Court approved the Proposed Distribution Plan (“Approved Distribution Plan”). Relevant information and documents can be found at: https://fnymrcdistribution.powerappsportals.com/courtdocs/.
Starting on December 9, 2024, the Distribution Administrator began accepting EB-5 Investors' Proof of Claim Forms and supporting documents through mail and the online submission portal.
Who is Potentially Eligible to participate?
If you invested in or made capital contributions to USCIS-approved EB-5 New Commercial Enterprises (“NCEs”) sponsored by Defendant Fleet, i.e., EMMCO, L.P., EMMCO Tower, L.P., EMMCO NQMC, L.P., EEGH, L.P., or EEGH II, L.P and participated in the EB-5 immigration program in connection with your investment, you may be eligible to receive a fund distribution in accordance with the provisions of the Plan approved by the Court.
EB-5 Investors' Options under the Court-Approved Distribution Plan:
A. Option I – Request for Direct Distribution
B. Option II – Sending Distribution Funds back to the InvestedNCE(s) (conditional)
C. Option III – Sending Distribution Funds to Another EB-5 Program-relatedNCE (with no relationship with Defendants Fleet, Xia, and other individual defendants) (conditional)
For a detailed explanation of the options, please visit our website at: https://fnymrcdistribution.powerappsportals.com/Forms-and-Instructions/
Determination of Recovery Amount:
The Distribution Payment and its amount to be distributed to each EB-5 Investor shall be determined by the methodology set forth in the Plan but shall not exceed $550,000.
How to Submit Your Claim?
An EB-5 Investor must submit the Proof of Claim Form along with notarized documents by mail to the Administrator's office no later than 11:59 p.m. EST on August 15, 2025.
Seiden Law LLP
ATTN: Robert W. Seiden, Esq., The Distribution Administrator
322 8th Avenue, Suite 1200
New York, NY 10001
EB-5 Investors may submit their supporting documents through the Administrator's online submission portal at https://fnymrcdistribution.powerappsportals.com/File-a-Claim/ or by mail.
Questions or Concerns?
If you need assistance in completing the claim form or have any questions about the Distribution Fund, you may obtain more information by visiting the Q&A webpage https://fnymrcdistribution.powerappsportals.com/FAQ/ or contact the Distribution Administration Team by email at EB5@seidenlaw.com.
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SOURCE Seiden Law Group LLP
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