Their money was meant to help create jobs – instead, it looks like they’ve gone to buy a man three mansions.
This is what the Securities and Exchange Commission claims in a case brought against Queens developer Richard Xia.
According to documents filed by the government agency in a federal court in the eastern district of New York earlier this month, Xia allegedly defrauded a group of investors by not using their money to develop two Queens real estate projects, but to buy three Long Island mansions, informs Crain.
Xia used assets from its investors – which were part of the federal EB-5 visa program that gives investors in job-creating US real estate projects green cards – as collateral to get over $ 30 million in loans, which went significantly to the purchase of two estates in Great Neck and one in Sands Point. Meanwhile, one of the Queens projects that investors thought they were financing – a 498-room luxury hotel, conference center, retail space and performing arts center called Eastern Emerald – is still undeveloped.
The Tony Long Island properties, on the other hand, are heavily built, and Xia currently lives with her wife in one: a 13,000-square-foot Kings Point Road home with seven bedrooms, seven fireplaces and 13 bathrooms spread over 3 acres overlooking Manhattan skyline and Long Island Sound.
In a deposit defending his purchase of the property (which is under his wife’s name), Xia claimed it was a business transaction because he uses it as an office, Crain reported.
The other two properties are a 10,000-square-foot, nine-bedroom Middle Neck Road property, complete with a tennis court, cabin and beach access, which was purchased by one of Xia’s contractors; and a 12-bedroom, 12,000-square-foot home with a four-car garage, indoor pool and tennis court in Sands Point. Xia claims that he bought the latter property with the intention of using it as a contaminated land dump site.
“We still have a lot of dirt at the site of the Eastern Emerald Project. Because, you know, doing the work – construction – we have to dig all this dirt and dump it at another dumping site,” Xia has previously tried to explain. reported Crain. “And here it’s a perfect dump because the big different heights here. If you just level them, the property value can increase and … the land can be recycled. “
The SEC’s latest applications against Xia are only the latest development in the legal hole in which his development projects have landed him.
By the beginning of 2021, he had been named as a defendant in over 20 project-related lawsuits, with allegations dating back to 2010.
“Since 2018, many investors have demanded repayment of their funds, including through lawsuits,” it said in an SEC application in late 2021. “No investor has so far received his capital deposits back. And given that the projects consist of an unfinished building and a hole in the ground with insufficient funds to complete both projects, the prospects for investors to receive their capital contributions are at best remote. “