Two Defendants Plead Guilty to Federal Charges Filed in Connection with Oakland-Based EB-5 Visa Investment Scheme
OAKLAND - Thomas Henderson pleaded guilty in federal court today to one count of conspiracy to commit wire fraud and one count of making a false statement to a government agency related to his role in deceiving investors in various Oakland, California-based businesses, announced Acting United States Attorney Stephanie M. Hinds; U.S. Department of State’s Diplomatic Security Service (DSS) Special Agent in Charge William Chang; Homeland Security Investigations Special Agent in Charge Tatum King; and Federal Bureau of Investigation Special Agent in Charge Craig Fair. A second defendant, Cooper Lee, also pleaded guilty to one count of conspiracy for his role in diverting certain investor funds. The guilty pleas were accepted by the Hon. Richard Seeborg, Chief U.S. District Judge.
Henderson, 72, of Oakland, and Lee, 44, formerly of Oakland, pleaded guilty to charges pursuant to separate plea agreements entered by the court. According to Henderson’s plea agreement, Henderson admitted he formed the San Francisco Regional Center, LLC (SFRC) in 2010 to raise money from foreign investors through the “EB-5” visa program, a job-creation and immigration program administered by U.S. Citizenship and Immigration Services (USCIS). From 2011 to 2017, SFRC raised more than $100 million from foreign investors for seven commercial enterprises approved under the EB-5 program. Henderson admitted that by at least the middle of 2014, SFRC began using investor funds for purposes and projects other than the specific enterprise corresponding to the investment, and that investors were not specifically told that their investment funds would be or were used for those purposes. For example, Henderson admitted that funds raised from 42 investors for the enterprise North America 3PL LP were used for other projects and businesses, including to fund the operation of earlier struggling projects. Henderson also admitted that he made false statements to USCIS when he submitted a declaration to the agency regarding the use of North America 3PL investor funds.
According to Lee’s plea agreement, from about August 2016 to January 2017, Lee conspired with Henderson to divert some funds raised for the EB-5 enterprise operating as California Gold Medal LP to other EB-5 enterprises and businesses controlled by Henderson. Lee admitted that he transferred funds and prepared documents to make it appear that the transfers were for legitimate business transactions.
USCIS administers the EB-5 visa program. Under the program, foreign nationals may obtain permanent United States residency, commonly known as a Green Card, by investing in qualifying U.S. businesses and creating jobs for U.S. citizens and residents. To receive a two-year grant of conditional permanent residency status, foreign investors must meet certain requirements for an entry visa, comply with program requirements and make an investment of a minimum of $1 million, or $500,000 if the investment is made in certain areas of high unemployment. After two years, the foreign investor and immediate family can petition for permanent residency after meeting program requirements, including the creation of at least 10 jobs for United States citizens and residents through the business funded by the investment.
Chief Judge Seeborg scheduled Lee’s sentencing for December 7, 2021, and Henderson’s sentencing for June 7, 2022.
Henderson pleaded guilty to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and one count of making a false statement to a government agency, in violation of 18 U.S.C. § 1001(a)(2). The conspiracy charge carries a maximum statutory penalty of 20 years in prison and a fine of up to $250,000. The false statement charge carries a maximum penalty of 5 years in prison and a fine of up to $250,000. Lee pleaded guilty to one count of conspiracy, in violation of 18 U.S.C. § 371, which carries a maximum penalty of 5 years in prison and $250,000. Under the terms of each plea agreement, other charges will be dismissed at sentencing if the defendant complies with the agreement. The court also may order additional terms of supervised release, fines, forfeitures, and restitution; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Lloyd Farnham and Sheila A.G. Armbrust are prosecuting the case, with the assistance of Patricia Mahoney. The prosecution was the result of an investigation led by the U.S. Department of State Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by the HSI, with the participation of the Federal Bureau of Investigation. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation. Additional assistance was provided by the San Francisco Regional Office of the Securities and Exchange Commission.