SARC Files a Multi-Million Dollar Counterclaim Which Alleges Significant Fraudulent, Deceitful and Unethical Acts Engaged by the Foreign Plaintiffs Personally or Through Their Paid Representatives in the Palm House Hotel EB5 Class Action Suit

PALM BEACH, Fla., April 18, 2017 /PRNewswire/ -- On April 14^th, 2017, a significant countersuit was filed on behalf of South Atlantic Regional Center ("SARC"), associated persons and companies against the 58 plaintiffs in the Palm House Hotel EB5 Project in Palm Beach, Florida. This countersuit comes after analyzing thousands of documents, which clearly outline a plan by the plaintiffs to defraud and defame both the companies and individual persons named in the suit.  The alleged scheme, however, clearly violates the statutory directives of the EB-5 investment program, which require that investments made for the purpose of generating jobs be "at risk." 2 8 C.F.R. § 204.6(j)(2). Furthermore, far from being innocent victims, the Counter- Defendants, as it relates to the various guarantee agreements alleged in the Complaint, were essential participants and prime actors in the very misconduct for which they now seek damages.

Within the EB5 immigration program many petitioners in China and other countries hire agents to commit acts contrary to both the "Spirit of the Law" and the actual direct requirements of the law by inserting themselves with developers and other persons who have controlling interest in job creating projects in the USA.  The petitioners pay generous sums of money to the agents, often in the tens of thousands of dollars, to apply pressure and create confusion and tension to achieve their desires. Most often they require direct assurances of security of their capital and special monetary deals and ownership interests, which is against the law governed by the USCIS, (United States Citizens and Immigration Service), part of The Department of Homeland Security.

As clearly stated in the countersuit, several of the agents, on behalf of their clients and themselves, sought to receive fraudulent security interest, un-disclosed commissions and even suggested bribing USCIS governmental officials as they sought their immigration status.  Unfortunately, these practices are becoming more common in the industry in the foreign lands providing the petitioner applicants. If a project has a problem, these self-same petitioners, act as innocent participants, and subsequently attempt to defraud the USCIS, the US Courts and regulatory systems by using means common in their cultural understanding.  Often this is a system that has rules and operative imperatives that are essentially different from our own.  In this case, common guidance is based on "The Art of War", Sun Tzu, who clearly states, "all warfare is based on deception".  Hence, these plaintiffs intended to deceive The Department of Homeland Security ("DHS"), the USCIS, the Federal Courts, the General Partner and Limited Partners who sought an honest path to their immigration. Of course, the plaintiffs would find these practices common in their culture where "Rule of Men" supersedes "Rule of Law".  In other words, in their country of origin, the petitioners are rich and powerful and therefore get what they desire regardless of the law.

The acts of the plaintiffs and their legal counsel, both in the USA and China are unconscionable.  The countersuit shows how they sought to withhold information and created side-deals, which were hidden from SARC, Joseph Walsh and his companies.  Once found out, they proceeded to sue Mr. Walsh, defame his companies in China and the USA, create untold costs to defend the case already in progress and interfere with the legal proceedings in an effort to hide their "bad acts" and deception.                                                           

Hyperbole and sensationalism were used. For example, the amount of the suit, which claims to be for $50,000,000 dollars, is a gross overstatement of the facts.  Truthfully, these 58 plaintiffs only invested $500,000 each, for a total of $29,000,000, the lawsuit almost doubled the amount invested.  This, in itself, is a perverse travesty of justice.   

Actions were pursued to deceive the court system. Theses plaintiffs were promised windfall profits by their legal representatives.  Records, which have surfaced in the case, indicating the plaintiffs are trying to establish ownership of the property through the dissolution of the partnership, which is legally barred in the terms of the Limited Partnership Agreement.  This action attempts to exclude the General Partner and other Limited Partners, by forcing the sale of the property for the plaintiffs own personal gain.

The court records clearly indicate that SARC, in its capacity as the General Partner, discovered fraudulent activities committed by the developer, his wife, brother and other legal representative who have "dirty hands" abating and assisting the fraudulent activities though a series of falsified documents and shell companies. 

Through discovery it was found that the plaintiffs and their assigned representatives themselves, were colluding with the fraudulent parties in an effort to secure the property and profit by the same.

Palm House Hotel, LLLP, the Lender for the Palm House Hotel reconstruction, along with its General Partner, South Atlantic Regional Center ("SARC"), and Mr. Walsh have always vigorously denied the allegations in the federal lawsuit. The countersuit clearly identifies that the plaintiffs, their paid representatives, and Robert Matthews, his wife Mia Matthews, brother Gerry Matthews and other entities and accomplices colluded to defraud the General Partner, the USCIS, regulatory agencies and local authorities.

The Palm House, LLLP and Mr. Walsh plan to continue the prosecution of their civil lawsuits to recapture diverted loan proceeds used for the personal gain of the Matthews family and related entities and accomplices. At the same time, Palm House, LLLP and Mr. Walsh are seeking Court approval to expand the Receiver's powers to refinance the completion of the Hotel, to restructure ownership, and to provide for legal expenses for the Limited Partners. This restructuring will create the jobs necessary to complete the immigration application process in which the Plaintiffs originally invested.

The facts continue to demonstrate the sustained and significant effort that Mr. Walsh and his companies have expended on behalf of the investors and the Hotel's completion. These efforts were underway well before allegations were made in recent lawsuits.  Meanwhile the facts are being distorted by the plaintiffs, their paid representatives and the developers in an effort to benefit the Matthews family and their co-conspirators.

"Clearly, these fraudulent parties are nearing the end of their ability to defraud anyone else," said Mr. Walsh. "We feel this countersuit brings to light the significant actions taken by the plaintiffs to withhold information and defraud the USCIS and SARC, the Regional Center and General partner in the Palm House Hotel Project.   This new information, brought in the countersuit, brings a confidence that our continued actions will result in a positive outcome for all stakeholders in the very near future."

SOURCE SARC