Chinese Investors’ Case Against Governor, Clinton Brother Tossed (1)

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By Laura D. Francis

A lawsuit by Chinese investors who accused former Virginia Gov. Terry McAuliffe and Anthony Rodham, the brother of Hillary Clinton, of fraud has been dismissed by a federal judge.

The investors, who sought green cards through an investment-based visa program, couldn’t show that McAuliffe and Rodham committed any fraud or that the two breached a fiduciary duty to them, Judge Claude M. Hilton of the U.S. District Court for the Eastern District of Virginia said Sept. 5.

The lawsuit, filed last year, accused the pair of taking advantage of the investors’ desire for U.S. residence and fraudulently telling the investors that they could use their influence with the federal government to ensure that the investors would get their green cards and their money back.

The investors went through the EB-5 immigrant investor program to invest in Gulf Coast Funds Management LLC, a limited partnership that loaned money to McAuliffe’s GreenTech Automotive, an electric car company that didn’t perform as promised and eventually went bankrupt.

Under the EB-5 program, foreign nationals can obtain a green card if they invest at least $500,000 in a commercial enterprise that creates 10 U.S. jobs.

“The court’s decision ignores the law. We are confident it will be reversed on appeal,” Scott Abeles of Gerard Fox Law in Washington said in a Sept. 6 email to Bloomberg Law. Attorneys for McAuliffe and Rodham didn’t respond to Bloomberg Law’s request for comment.

DHS Official Implicated

In addition to implicating McAuliffe and Rodham, the investment scheme marred the confirmation process for Alejandro Mayorkas to become deputy Homeland Security director with the Obama administration.

Mayorkas had been head of U.S. Citizenship and Immigration Services at the time Gulf Coast applied to become a regional center under the EB-5 program. Several Republicans accused him of unduly influencing the agency’s decision to approve Gulf Coast after its application initially had been denied.

The Homeland Security Department’s Office of Inspector General later determined that Mayorkas had created a perception of impropriety.

Regional centers allow investors to pool their money and count indirect job creation toward the EB-5 visa requirements.

The case is Bi v. McAuliffe, 2018 BL 320262, E.D. Va., No. 1:17-cv-01459, 9/5/18.

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