The U.S. Securities and Exchange Commission (SEC) has issued an announcement to freeze the assets of the Chicago Convention Center (ACCC), the Intercontinental Regional Center Trust of Chicago (IRCTC), and Mr. Anshoo R. Sethi (collectively referred to as the "Project Parties"), and has halted the promotion of this investment immigration project. Simultaneously, the U.S. Citizenship and Immigration Services (USCIS) has ceased processing applications for this project.
The SEC stated that it will continue to conduct an in-depth investigation into this project and is seeking permanent court injunctions as well as relevant economic penalties and disgorgement. The $145 million in EB-5 investment funds held in the project's accounts have been fully frozen, and Mr. Sethi has been ordered to return all used or disbursed offering fees.
Was Worldway Group once the sole chief agent for this project in China?
Yes. In August 2011, Worldway Group was appointed by the Project Parties as the sole chief agent in China. In September, we were invited to attend the launch ceremony in Beijing, where we joined the Governor of Illinois to initiate the project. However, subsequently, after research conducted by our U.S. Project Management Department, we discovered numerous suspicious points regarding the Chicago Convention Center project, which were vastly different from the five major project advantages claimed by the Project Parties. Therefore, in October 2011, we summoned Mr. Anshoo R. Sethi to announce that Worldway Group was resigning as the sole chief agent for the Chicago Convention Center in China, withdrawing from the promotion of the project, and terminating our cooperation with the Chicago Convention Center project team.
To clarify the facts and allow the industry and EB-5 investors to understand the truth as soon as possible, while disclosing the SEC's lawsuit against the Chicago Convention Center project team, Worldway Group published the "Worldway Group Statement" on our official website (www.worldwayhk.com) on February 9, and released the English version of the "Worldway Group Statement" on relevant U.S. EB-5 professional websites. This responsible approach by Worldway Group has been praised and supported by the U.S.-China immigration community and EB-5 investors.
How many Worldway Group clients were affected by the Chicago Convention Center project?
Worldway Group Project Director: Not a single Worldway client invested in the Chicago Convention Center. After discovering the issues and terminating our cooperation with the project team, Worldway Group required all subsidiaries to explain the truth to clients immediately, in line with our highly responsible attitude toward our clients. Our sincerity was understood and supported by our clients, and without exception, all clients transferred their investments to other EB-5 projects.
It can be said that this incident is the biggest scandal since EB-5 entered China, and it will have a certain impact on the U.S.-China immigration industry. As early as the beginning of 2009, Worldway was the first in the industry to propose that "EB-5 has entered the era of selected projects" and equipped itself with professional project analysts. Now, Worldway's risk monitoring for EB-5 projects has extended from project screening and due diligence to the establishment of post-investment project monitoring mechanisms, which is also an industry first. It is believed that after this incident, all immigration agencies will strengthen their due diligence on EB-5 projects to varying degrees, and the screening of EB-5 investment projects will become even more rigorous.