Distribution Plan Notice for EB-5 Investors: Essential Insights
Notice Regarding Distribution Plan for EB-5 Investors
In recent developments regarding the Eastern Mirage and Eastern Emerald projects, a notice has been issued concerning the distribution plan for EB-5 investors. This plan is critical for those impacted by allegations made against Richard Xia and Fleet New York Metropolitan Regional Center.
Background of SEC Lawsuit
The United States Securities and Exchange Commission (SEC) filed a lawsuit against Richard Xia and Fleet for securities fraud in connection with projects that raised over $229 million from EB-5 investors. These funds were intended for real estate developments but were misappropriated, leading to significant legal consequences and financial restitution requirements.
Allegations Against Defendants
The SEC alleged that Xia and Fleet made multiple misleading representations to investors about the usage of funds, the financial backing, and the credentials of those involved in the projects. They also misrepresented the affiliations of the Eastern Mirage hotel project and neglected to disclose important conflicts of interest.
Financial Implications of the Lawsuit
The court's final judgment called for the defendants to pay over $272 million, including disgorgement and penalties. A portion of these funds has been earmarked to create a distribution pool for eligible investors, marking significant steps towards restitution.
Approved Distribution Plan Details
Recently, the court approved a distribution plan that outlines how funds will be distributed to impacted EB-5 investors, starting from a designated date. The plan includes specific methodologies that dictate how recovery amounts are determined, ensuring fairness and transparency in the distribution process.
Eligibility Criteria for Investors
To be eligible for participation in the distribution plan, investors must have contributed to EB-5 projects sponsored by Fleet, such as EMMCO, L.P. and EEGH, L.P. This eligibility is linked directly to their investment's involvement in a USCIS-approved New Commercial Enterprise.
Distribution Options Available
Investors have several options under the approved distribution plan that allows them to choose their preferred method for funds distribution. These options vary from direct payments to allocations back to other approved entities.
Procedures for Claim Submission
Claim submissions must be made by all eligible EB-5 investors by a specified deadline. This involves completing a Proof of Claim Form and submitting it along with required notarized documents.
Administrator and Contact Information
Robert W. Seiden has been appointed as the administrator overseeing fund distributions. Investors can address any questions or concerns directly to his office, with all claims needing to be directed to a designated address.
Frequently Asked Questions
What is the deadline for submitting claims?
Claims must be submitted no later than 11:59 p.m. EST on August 15, 2025.
Who is eligible to receive distributions?
Eligibility is limited to those who invested in USCIS-approved EB-5 New Commercial Enterprises sponsored by Fleet.
What are the available options for fund distribution?
Investors can opt for direct distribution, sending funds back to invested NCEs, or transferring funds to unrelated EB-5 programs.
How is the recovery amount determined?
The amount distributed to each investor will be calculated based on a specified methodology but will not exceed $550,000.
How can investors seek assistance with claims?
For help, investors are encouraged to visit the relevant Q&A webpage or contact the Distribution Administration Team for further guidance.
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