Couple Fights SEC's $65M Penalty Bid In EB-5 Fraud Row
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A husband and wife facing allegations that they misappropriated the bulk of $26.9 million raised in an EB-5 immigrant investor program urged a California federal court on Wednesday not to listen to the U.S. Securities and Exchange Commission’s recommendation that they be ordered to pay an “excessive” $65.7 million penalty.
Charles Liu and Xin Wang say that the SEC is simply asking for too much in disgorgement, penalties and interest should the court ultimately rule in its favor over the outcome of the money purportedly raised from foreign investors for a cancer treatment center, according to their memorandum.
Rather, the couple suggests that the court start at $26.9 million and go down from there, giving them credit for “legitimate business expenses” such as the $9 million they conveyed as commission payments to overseas marketers and the $2 million they spent on salaries, according to the memorandum. They argue that that a $10.9 million penalty would be more appropriate.