Securities & Exchange Commission vs. Path America Case Study

Exclusively available on Available only on IvyPanda® Made by Human No AI

Introduction

The article ‘SEC adds millions to developer’s alleged fraud in Seattle’ features a recent multi-million fraud scandal involving Lobsang Dargey, developer at Path America. Dargey is facing trial for a case of fraud amounting to millions of dollars (Bhatt, 2015). According to the U.S. immigrations laws, anyone who wishes to invest half a million dollars in the American economy may be entitled to the EB-5 visa program (Bhatt, 2015).

Dargey used the visa program as a façade for his fraud luring about 250 Chinese businessmen into investing as much as $125 million for two real estate projects (SEC, 2015). The investors who agreed to finance the projects were promised by Dargey that their funds would be used in accordance with EB-5 program goals when in reality, only $17 million was used by Dargey for legitimate purposes while the remaining $63 were spent on unrelated projects not eligible for EB-5 visa program (SEC, 2015).

Key issues

The fraud case has gained its notorious popularity because it is international in nature. Moreover, the case revolves around socially-important, large-scale real-estate projects: a skyscraper in Seattle and a commercial and residential development. Undoubtedly, the magnitude of the fraud affects many parties involved, both inside and outside the U.S.

Involved stakeholders

According to the United States District Court (2015) “Most of the direct victims of this fraud are foreign nationals seeking residency in the United States” (p. 2). The court referred mainly to the direct victims of the fraud, who had lost their money hoping to obtain citizenship in the U.S. However, the court’s ruling to freeze Path America’s bank accounts, a company owned by Lobsang Dargey, put a halt to several large-scale projects leaving thousands of U.S. citizens without jobs.

Choices and tradeoffs

Although the involved parties could request their money back, interestingly, very few of the investors asked for a refund (Bhatt, 2015). The main reason is that the real-estate project is 95% complete, and there is little to no sense for investors to back up now (Bhatt, 2015). Furthermore, the project created job places which are eligible for obtaining a green card. Dargey’s attorney said that the court ruling to freeze the bank accounts will have ramifications for the immigrant investors who are hoping to obtain EB-5 visas (Bhatt, 2015).

Questions raised

The case of fraud will have an impact that will touch upon many areas and involve many stakeholders. Firstly, the EB-5 visa program that attracts investment from overseas and creates jobs for U.S. citizens has been compromised due to the large-scale fraud. Many entrepreneurs contemplating launching businesses in the U.S. will become more cautious regarding their investments. Secondly, the asset freeze and the project halt resulted in the loss of jobs among the employees who had been working on the project.

Although it is undoubtedly a case of fraud, observers may be faced with a contradiction because Lobsang Dargey did not gamble the money away in casinos or put it in offshore bank accounts. This statement is backed up by Daniel Dunne, Dargey’s defense attorney who claimed that the money had been invested in a range of potentially successful projects that are likely to create jobs and yield positive results for the community.

Conclusion

Although the money was invested with a good cause in mind – building a number of real estate projects and a farmer’s market, it would be wrong to justify Dargey’s actions. To start with, it is not his money; secondly, he misled 250 Chinese investors who perhaps had to part with their last savings hoping to obtain a legal residency in the U.S. To put it into simple words, Dargey did cheat Chinese investors, took their money and used it for unrelated projects.

Dargey’s attorneys are doing everything possible to portray the defendant as a Robbin Hood, who had taken the money from affluent investors and invested it in socially-important projects. Despite that, Dargey should be prosecuted and punished according to the U.S. law, and no compromise should be offered.

Reference List

Bhatt, S. (2015). SEC adds millions to developer’s alleged fraud in Seattle. Web.

. (2015). Document 1. Web.

U.S. Securities and Exchange Commission. (2015). . [Press release]. Web.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2020, September 12). Securities & Exchange Commission vs. Path America. https://ivypanda.com/essays/securities-amp-exchange-commission-vs-path-america/

Work Cited

"Securities & Exchange Commission vs. Path America." IvyPanda, 12 Sept. 2020, ivypanda.com/essays/securities-amp-exchange-commission-vs-path-america/.

References

IvyPanda. (2020) 'Securities & Exchange Commission vs. Path America'. 12 September.

References

IvyPanda. 2020. "Securities & Exchange Commission vs. Path America." September 12, 2020. https://ivypanda.com/essays/securities-amp-exchange-commission-vs-path-america/.

1. IvyPanda. "Securities & Exchange Commission vs. Path America." September 12, 2020. https://ivypanda.com/essays/securities-amp-exchange-commission-vs-path-america/.


Bibliography


IvyPanda. "Securities & Exchange Commission vs. Path America." September 12, 2020. https://ivypanda.com/essays/securities-amp-exchange-commission-vs-path-america/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1