A Southern California couple has been charged with fraud for taking millions of dollars from Chinese investors who thought they were investing in an innovative cancer treatment center, the Securities and Exchange Commission announced Friday.
Charles C. Liu and his wife, Zin “Lisa” Wang, of Laguna Niguel diverted $18 million from investments they received through the EB-5 program, which grants residency status to foreigners who make large investments in job-creating projects. The SEC obtained an asset freeze against the couple and the various entities they controlled involved in the scheme.
The $27 million raised from 50 investors was supposed to be used to build and operate a new cancer treatment center that would use proton beam radiation to help oncology patients in Southern California. The couple diverted $11 million to firms in China and another $7 million to their personal accounts, according to the SEC complaint filed in federal court in Los Angeles.
Promotional materials said the project would create more than 4,500 new jobs and have a substantial impact on the local economy. No construction has taken place for the 18 months that money was collected, the SEC says.
According to the SEC’s complaint, one of the websites Liu and Wang used to promote investments in the cancer center project includes a section entitled “Government Support” with photos of former President George H. W. Bush and former California Governor Arnold Schwarzenegger. Their photos are accompanied by what appear to be letters they wrote in support of proton therapy in general rather than the depicted EB-5 project, which had not even been initiated at the time the letters were written.
“We allege that Liu and Wang are using investor funds as their personal piggy bank and exploiting Chinese residents who were assured they were investing in an innovative project to create jobs and cure cancer patients,” says Michele Layne, director of the SEC’s Los Angeles Regional Office.