Wednesday, February 22, 2017

Hotel developer gets three-year sentence in visa fraud case

(Crain's Chicago Business) A Chicago developer who swindled nearly 300 Chinese investors in a failed $912 million hotel project near O'Hare International Airport was sentenced to three years in prison today. U.S. District Judge John Z. Lee also ordered the developer, Anshoo Sethi, to pay $8.8 million in restitution, according to a spokesman for the U.S. Attorney's Office in Chicago. In January 2016, Sethi pleaded guilty to charges that he defrauded 290 Chinese citizens who had agreed to invest $158 million in the development through a controversial U.S. visa program. 

Sethi, 33, raised the money for the 995-room project at 8201 W. Higgins Road through the EB-5 program, which issues green cards to overseas investors who invest in qualified U.S. projects. But he never broke ground, and Sethi admitted that he used bogus and forged documents to solicit investors. Several lawmakers in Washington are pushing to end or reform the EB-5 program amid criticism that it's vulnerable to fraud—Sethi's project stands out as the largest EB-B fraud case to date—and doesn't do enough to create jobs in depressed areas. Prosecutors had asked Judge Lee to sentence Sethi to 78 to 97 months in prison and order him to pay $10 million in restitution, court records show. Sethi has already repaid most of the money he raised from investors, and he sold the development site last fall for $6.8 million to Chicago developer Albert Friedman.

“Anshoo Sethi abused the EB-5 visa program and blatantly lied to investors and the United States government on a massive scale,” Assistant U.S. Attorney Sunil Harjani said in a statement. “Overseas investors spent much time and energy making the difficult decision to invest in the Sethi project, and processing their visa applications—not knowing that the project was built on a bed of lies and forged documents.” An attorney representing Sethi did not respond to requests for comment.

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