MIL-OSI USA: Richard Xia, a/k/a Yi Xia and Fleet New York Metropolitan Regional Center, LLC, f/k/a Federal New York Metropolitan Regional Center, and Relief Defendant Julia Yue, a/k/a JiQing Yue

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Source: Securities and Exchange Commission

On September 27, 2021, the Securities and Exchange Commission filed an emergency action and obtained an asset freeze, among other relief, against Richard Xia (a/k/a Yi Xia) and his company, Fleet New York Metropolitan Regional Center, LLC (f/k/a Federal New York Metropolitan Regional Center, LLC), for committing securities fraud in connection with two real estate projects in Queens, New York.

The SEC’s complaint alleges that from 2010 through late 2017, Xia, through Fleet, fraudulently raised more than $229 million through five EB-5 offerings from more than 450 investors. The funds were allegedly raised for Xia’s two real estate development projects – the Eastern Mirage project and the Eastern Emerald project. According to the complaint, the offering materials made material misrepresentations regarding the sources of financing for the projects, the experience of the projects’ development and construction team, the scope of the Eastern Emerald project, and the existence of lease agreements among several entities that Xia owns and controls. Additionally, Xia allegedly misappropriated approximately $17 million in Eastern Mirage investor funds, and at least $11.8 million in Eastern Emerald investor funds.

The SEC’s complaint, filed in the United States District Court for the Eastern District of New York, charges Xia and Fleet with violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The SEC seeks, among other relief, a permanent injunction, disgorgement, prejudgment interest, civil penalties, an asset freeze, and the appointment of a monitor. The complaint also names Xia’s wife, Julia Yue (a/k/a JiQing Yue), as a relief defendant and seeks disgorgement and prejudgment interest from her.

The SEC’s investigation was conducted by Kim Han, Brenda Wai Ming Chang, Neil Hendelman, David Stoelting, and Judith Weinstock under the supervision of Lara Shalov Mehraban. The examination that led to this investigation was conducted by the NYRO Broker-Dealer Exchange Examination Program. The SEC’s litigation is being led by Mr. Stoelting, Kevin McGrath, and Ms. Han.

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