Recently, the U.S. Securities and Exchange Commission (SEC), issued a $14 million payout in a whistleblower case involving a massive real estate scam.
The case involves allegations made in 2013 involving some 250 investors, who were, for the most part, from China, and who claimed to have been â€śduped by Anshoo R. Sethi, 30, and two of his companies, according to The Wall Street Journal. Allegations include that Sethi and his two Chicago, Illinois-based companies tricked the investors into paying in excess of $155 million for a so-called plan to build a hotel and a conference center, people familiar with the matter told the Journal.
According to the SEC, the investors claim they believed they were increasing their chances of receiving green cards. The scam involved qualification for immigration providing United States residency that was tied to investments that created employment, the Journal reported.
According to an SEC press release issued earlier this month, Sethi and his companies sold in excess of $145 million in securities and collected $11 million in administrative fees from investors. According to Compliance Week, the investors were led to believe that by buying interests in ACCC that they would be financing construction of what was described as the â€śWorld’s First Zero Carbon Emission Platinum LEED certifiedâ€ť hotel and conference center to have been built close to Chicago’s O’Hare Airport.
The investors were also led to believe that the investments would be improving their likelihood of receiving U.S. citizenship through the EB-5 Immigrant Investor Pilot Program. This program provides overseas investors a way in which to obtain U.S. residency by investing in domestic projects that either create or preserve a number of jobs for U.S. workers, according to Compliance Week.
The SEC alleged that Sethi and his two companies did not have the required building permits. Also, according to the Journal, their claims of being supported by major hotel chains were bogus, as was documentation provided to immigration authorities. The federal government decided that the whistleblower was due 10 percent of the money recovered for the investors. The whistleblower is being allowed to maintain anonymity.
“We’re confident there will be more frequent and numerous payouts as the program continues to gain momentum,” SEC enforcement chief Andrew Ceresney, told the Journal. The Journal pointed out that this whistleblower was paid about 27 times more than National Football League (NFL) Seattle Seahawksâ€™ quarterback, Russell Wilson. Wilson led the team to Super Bowl victory this year.
The award, issued September 30, 2013, is considered the most significant whistleblower award by the SECâ€™s Office of the Whistleblower, according to Compliance Week.
The $14 million totals about 10 percent of the funds returned back to investors, and is, explained Compliance Week, on the lower end of the 10-30 percent of the whistleblower award range established under the Dodd-Frank Whistleblower Program.