The SEC accused Lobsang Dargey, a former Tibetan monk and now real estate developer, of siphoning almost $18 million from Chinese investors who sent him $125 million, seeking residency under a visa program. The SEC has since frozen Dargey’s assets and the assets of his “Path America” companies.

The SEC’s civil complaint states that Dargey and his partners “fraudulently raised at least $125 million through their sales of securities to 250 investors and collected at least $11 million in additional fees.” Dargey allegedly had each of his investors send $500,000 to an offshore bank and $45,000 in “administrative fees” to U.S. accounts. The SEC further claims that Dargey spent $14.7 million of that money on unrelated projects and took $3 million for himself, including $2.5 million that he used to pay for a house and $350,000 he gambled away.

Dargey and his companies sold securities to Chinese investors, apparently for a farmer’s market and mixed-use commercial and resident development in a town north of Seattle. However, the SEC alleges that they “misappropriated” $17.6 million of that money.

Dargey’s scheme operated by using U.S. residency as a lure “and the promise of investment returns, defendants have targeted and continue to target Chinese investors in a scheme to sell securities to finance two different real estate projects, a skyscraper in downtown Seattle and a mixed-use commercial and residential development containing a farmer’s market in Everett, Washington.” However, the SEC claims this was a front and that the defendants misappropriated the money.

Defendants have also allegedly taken about $14.7 million of investor funds for use in real estate projects under Dargey’s control through defendants Potala Shoreline, LLC and Potala Village Kirkland, LLC, which are unrelated to the projects for which the funds were raised.

The SEC is asking for disgorgement, an accounting, and an injunction ordering Dargey to return any money he has sent out of the country. The agency also wants his house and other property he allegedly bought with more than $6 million of illegally acquired money.

“We allege that Dargey promised investors their money would be used to develop specific real estate projects approved under the EB-5 program, but he misused millions of dollars to enrich himself and jeopardized investors’ prospects for U.S. residency,” the SEC said in a statement.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.