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Hotel Developer Gets Prison in Visa Scam

Monday, February 27, 2017

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A 33-year-old aspiring Chicago hotel developer will spend three years behind bars for bilking Chinese investors out of nearly $158 million for a hotel and convention center project that never got off the ground.

Anshoo Sethi was sentenced Tuesday (Feb. 21) after admitting that he fraudulently raised the funds from 290 Chinese investors who were expecting visas under the federal EB-5 program, according to Zachary T. Fardon, the U.S. Attorney for the Northern District of Illinois.

Chicago Ohare
Nicola / CC-By-SA via Wikimedia Commons

The hotel and convention center was to be constructed on a three-acre parcel of land near Chicago's bustling O'Hare International Airport.

That program grants visas to foreigners who invest at least $500,000 in approved projects under the program.

$900M Project Scam

Beginning in 2011, Sethi, the founder of A Chicago Convention Center LLC, purported to build a $900 million hotel and convention center near O’Hare International Airport in Chicago. The project was to be built on a three-acre parcel where his family once operated a budget hotel, reports said.

For two years, Sethi solicited Chinese nationals to invest in the project, misleading them about funding and tax credits from the State of Illinois and city of Chicago, and forging documents, prosecutors said.

He falsely convinced investors that large hotel chains such as Hyatt and Starwood were interested in the project, authorities said.

Sethi’s parents themselves invested nearly $11 million in the failed project, according to the Chicago Tribune.

Sethi pleaded guilty last year to one count of wire fraud in the case. His attorney, Patrick Collins, argued for a three month sentence, describing his client as ambitious and in over his head, according to the news outlet.

Victims Paid Back

The U.S. Securities and Exchange Commission brought a civil suit against Sethi and was able to restore approximately $147 million to the Chinese investors, authorities said.

visa
© iStock.com / belterz

The case represents the largest ever EB-5 criminal fraud case in the U.S., authorities said.

In addition to his prison term, U.S. District Judge John Z. Lee has ordered Sethi to pay $8.85 million in restitution to the victim investors.

The case represents the largest EB-5 criminal fraud case in the U.S. to date, authorities said.

‘Bed of Lies’

“Overseas investors spent much time and energy making the difficult decision to invest in the Sethi project, and processing their visa applications—not knowing that the project was built on a bed of lies and forged documents,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum.

In a statement provided to local news outlets after his guilty plea, Collins said his client had “acknowledged and accepted responsibility for the mistakes he made while pursuing his vision to build a hotel and convention center and create jobs in Chicago.”

“This was a real project,” Collins told the Chicago Sun Times. “They hired architects.” 

   

Tagged categories: Business management; Business matters; Convention Centers; Criminal acts; Developers; Ethics; Hotels; Laws and litigation

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