Bellevue Developer Sentenced To Four Years In Prison For Fraud
Lobsang Dargey, a Bellevue developer convicted of scamming 280 investors from China out of $24.2M, was sentenced to four years in prison followed by three years of supervised release, the Seattle Times reports. The sentencing comes two years after the details of the crime came to light.
Dargey diverted the $24.2M into his own pocket while collecting $235M to invest in projects in Bellevue that the investors hoped would lead to green cards and U.S. residency, according to prosecutors. The investors were enticed by EB-5, a program that annually allots about 10,000 green cards, or permanent-residency visas, to wealthy foreigners who each invest $1M in a U.S. enterprise that creates at least 10 permanent, full-time jobs. Many investors can cut that number in half by investing in a rural area or an urban one with high unemployment. The discount is intended to encourage growth in struggling communities.
The investors that worked with Dargey reported they had sold their properties in China to raise the investment funds. Many had moved to the United States on temporary visas to start new lives in anticipation of getting a green card. As a result of the fraud charges, most of the investors have been denied green cards.
During the investigation, it came out that Dargey spent the funds on lavish dinners, Tiffany’s jewelry and fancy cars, among other extravagances. When the fraud was discovered after an investigation in 2015, his companies’ assets were frozen by the Securities and Exchange Commission. He pleaded guilty to conspiracy to commit wire fraud and concealing information from the federal government at the beginning of this year. He agreed to pay the money back in restitution, in exchange for a prison sentence capped at 10 years.
Many have questioned whether the EB-5 program is serving the communities that were intended by its creation. Money for the projects often flow to wealthier areas, and there have been many reports of fraud, locally and around the country. Congress is deliberating the continuation of the EB-5 program with a vote possible as early as next month.