A federal grand jury has indicted the owner of a San Jose law firm and her ex-husband in a visa fraud case that brought in foreign capital from more than 100 clients.
Prosecutors say 54-year-old Danhong “Jean” Chen, the sole partner at the Law Offices of Jean D. Chen, and her former spouse and office manager, 51-year-old Jianyun “Tony” Ye, falsified records to make their clients qualify for the EB-5 program.
The so-called “golden visa” offers U.S. residency in exchange for at least $500,000 in foreign investment in American businesses that create at least 10 jobs in low-employment census tracts. The minimum required for places that don’t suffer from a dearth of jobs is $1 million. All told, the program grants about 10,000 visas a year, with much of the money pooled into real estate investments.
The cash-for-visas program has come under greater scrutiny in recent years throughout the nation. Locally, it has been used to secure financing for projects in downtown San Jose, including the Silvery Towers—a luxury highrise embroiled in controversy after the feds accused one of its subcontractors of using slave labor.
Other projects in San Jose that sought EB-5 investment between 2013 to 2018—though not necessarily fraudulently, and not necessarily through Chen and Ye—include The Graduate, The Midpoint and ParkView Towers. For a more complete list, click here.
Under the EB-5 program, entrepreneurs looking for investments may establish regional centers to promote business opportunities to prospective visa applicants. In the case of Chen and Ye, they bought the Golden State Regional Center in 2014 and, according to prosecutors, falsified documents to conceal its true ownership.
Kai Hao Robinson, the person named as the one in charge of the agency reportedly had no idea the couple listed her as the legal owner.
Chen and Ye, who lived in Atherton at the time, used the regional center to siphon their clients’ money, which ultimately amounted to about $52 million, into a property they secretly controlled, according to the 14-count indictment unsealed earlier this week.
A civil complaint filed last fall by the U.S. Securities and Exchange Commission (SEC) claims the pair gleaned more than $12 million in commissions from the deals. According to the SEC, as soon as the couple found out they were being investigated, they tried to scrub records that would implicate them in the scheme. Ye and Chen each face several charges of visa fraud, identity theft and obstruction of justice.
“Chen’s alleged self-dealing breached her clients’ trust and violated the federal securities laws,” Melissa Hodgman, associate director of the SEC’s Division of Enforcement, said in a press release announcing the case last year.
Yea appeared in federal court in San Jose on Monday to enter a not guilty plea. He was released on a $750,000 bond.
Chen remains on the lam since the SEC filed its claim in October 2018 and, according to officials, may be using the pseudonym Maria Sofia Taylor.
When asked some months ago about the potential for abuse in the EB-5 program, which falls under the purview of the U.S. Citizenship and Immigration Services (USCIS), agency spokesman Michael Bars told San Jose Inside that what’s really needed is a legislative fix.
“Congress created the EB-5 program to benefit U.S. workers, the economy, and our communities by providing an incentive for foreign capital investment in the U.S., and ultimately create jobs,” he wrote in an email. “However, while it was originally well intended, the EB-5 program has too often been prone to instances of fraud and abuse, with foreign investors exploiting our system, undermining our laws and ultimately buying their way to citizenship without fulfilling their required contributions to the American economy as required by law. Until Congress can bring needed reforms to the EB-5 program, USCIS will remain committed to adjudicating applications fairly, accurately and efficiently in accordance with the law.”