Between September 2010 and October 2016, Thomas M. Henderson, owner of San Francisco Regional Center, LLC, solicited investments from predominantly Chinese nationals for projects financed through the EB-5 Program. Henderson’s regional center advertised seven projects under the Program, including call centers, a skilled nursing facility, a retail grocery and restaurant, and a dairy processing business.

In total, Henderson raised approximately $107 million from 215 foreign investors. The investments had two components: a $500,000 capital contribution (the minimum required for qualification under the EB-5 program) and a “syndication fee” between $40,000 and $60,000, depending on the individual project. In return, as long as the investments lead to the creation or preservation of at least 10 U.S. jobs, the foreign nationals would qualify for green cards.

However, the SEC alleges that Henderson combined a portion of investors’ funds with a general account for his own benefit. According to the allegation, Henderson’s withdrawals from San Francisco Regional Center investments for personal use included $1.4 million for a personal residence, $3.8 million to build and operate two Oakland-based restaurants, and $5.1 million to fund three non-EB-5 businesses. In total, the SEC alleges that Henderson used at least $9.6 million of investor funds for non-project purposes and an additional $7.5 million of investors’ capital contributions to pay overseas marketing agents “finders’” fees—fees which were originally allocated towards project development.