Lawyer Seyed Taher Kameli was denied his bid to dismiss an SEC EB-5 fraud lawsuit against him. The complaint accuses Kameli and his two fund managers of charging more than $4 million in undisclosed fees to investors, and using $16 million of investor funds for trading securities. Kameli wasn’t just selling EB-5 investments — most of the investors were also his legal clients.
Immigration lawyer also sold investments to his clients
Seyed Taher Kameli has been a busy man. Not only was he collecting $88.7 million in capital from 226 EB-5 investors, but he was legally representing most of these investors as well.
And, according to the SEC, he was also busy using some of the investor capital for personal reasons. The agency first brought a lawsuit against the Chicago attorney in June 2017, seeking to have him barred from the EB-5 program because of accusations of fraud.
But in September 2017 a judge dismissed the suit citing that the SEC was not specific enough in distinguishing the roles of Kameli and his two fund managers, Chicagoland Foreign Investment Group and American Enterprise Pioneers, in the scam.
The SEC returned with an amended suit in May 2019 and the judge declared that the agency had “remedied these defects” with the newly provided details of each misrepresentation including the party responsible.
SEC alleges misrepresentations in the PPMs
The new complaint alleges that the the private placement memorandums (PPMs) that Kameli gave to the investors misrepresented that their capital was going into an investment fund that was only investing in an EB-5 project. The SEC also alleges that the PPMs declared to investors that the fund managers would only be compensated once the projects started making money, and that the funds would be in compliance with EB-5 program requirements.
Kameli offers 20 grounds to dismiss — the court doesn’t agree
Kameli wanted the amended complaint dismissed for not being specific enough with regards to which defendant was responsible for each alleged misrepresentations in the PPMs. The judge did not agree with any of Kameli’s 20 grounds for dismissal of the suit. U.S. District Judge Joan Gottschall said this of the amended complaint: “The court concludes that the allegations are sufficiently particular.”
See the law360.com article [subscription required]
See the SEC complaint