On September 27, 2021, Securities and Exchange Commission (the “Commission” or “Plaintiff”), represented by Brenda Wai Ming Chang, David Paul Stoelting, Judith Ann Weinstock, Kevin P. McGrath, Lara Shalov Mehraban and Richard R. Best, attorneys at SEC’s New York regional office, filed a civil enforcement action against Richard Xia, a/k/a Yi Xia (“Xia”), Fleet New York Metropolitan Regional Center LLC, f/k/a Federal New York Metropolitan Regional Center, LLC (“Fleet”), and Relief Defendant Julia Yue, a/k/a JiQing Yue (“Yue”) (collectively, “Defendants”), seeking permanent injunctive relief including an asset freeze, disgorgement of all ill-gotten gains, prejudgment interest and other relief for misuse of investor funds. This case was filed in the United States District Court in the Eastern District of New York with Judges Kiyo A. Matsumoto and Cheryl L. Pollak presiding.
In the complaint, Plaintiff alleged that, “From 2010 through late 2017, Defendants fraudulently raised more than $229 million by offering and selling limited partnership interests to more than 450 investors. In connection with the offerings, Xia acted by and through Fleet, the General Partner of the limited partnerships that issued the securities.”
Plaintiff also alleged that, “Relying on the Defendants’ representations, investors contributed $56 million to the Eastern Mirage Project. Although the offering materials represented that the project would be completed in 2013, today it is an unfinished and empty glass tower. Between 2014 and 2017, investors contributed $173 million to the Eastern Emerald Project. Today, it remains a largely vacant dirt hole surrounded by a concrete wall.”
Further, Plaintiff alleged that, “A total of at least $9.7 million in ill-gotten gains was routed to personal bank accounts for Julia Yue for no legitimate business purpose. This includes $4.1 million she received between January 2012 and January 2019 and an additional $5.6 million she received in April and May 2021.”
Plaintiff then alleged that “About $77 million in investor funds remains in Xia-controlled bank accounts, which is insufficient to repay investors. Of the investor funds remaining, approximately $18 million were in CDs that matured on September 26, 2021 and are now readily available for Defendants’ potential misuse. The Defendants’ actions have jeopardized the investors’ prospects for any return of their capital contributions. And Xia continues to misuse investor funds.”
There are three claims for relief laid down by Plaintiff. The first claim is for the alleged violation of Securities Act section 17(a), the second claim is for alleged violation of Exchange Act Section 10(b) and Rule 10b-5, and the third claim is for alleged unjust enrichment.
In the prayer for relief, Plaintiff has requested the court to pass an order for an award of permanent injunctive relief along with an order for disgorgement of all ill gotten gains with prejudgment interest, civil monetary penalties pursuant Exchange Act Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)], and such further relief as the court may deem just and proper.
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1:21-CV-05350
09/27/2021
Pending - Other Pending
Finance - Security/Commodity/Exchange
Cheryl L. Pollak
Pamela K. Chen
Securities and Exchange Commission
Richard Xia
Fleet New York Metropolitan Regional Center LLC
Julia Yue
Yi Xia
Federal New York Metropolitan Regional Center, LLC
Jiqing Yue
Matthew Scott Peeler
Brenda Wai Ming Chang
David Paul Stoelting
Judith Ann Weinstock
Kevin P McGrath
Kim Han
Lara Shalov Mehraban
Richard R. Best
Herve Gouraige
Matthew Scott Peeler
Proposed Order
Declaration of M. Scott Peeler
ORDER granting #22 Motion to Appoint Expert. The Monitor's retention of J.S. Held is So Ordered. Ordered by Judge Pamela K. Chen on 11/3/2021. (Mahkamova, Shirin) (Entered: 11/03/2021)
Ex. 10
Ex.9
Declaration David Stoelting
Memorandum in Support
Proposed Order Appointing Monitor
(#2) MOTION for Temporary Restraining Order by Securities and Exchange Commission. (Attachments: #1 Proposed Order Appointing Monitor, #2 Memorandum in Support) (Bowens, Priscilla) (Additional attachment(s) added on 9/27/2021: #3 Declaration David Stoelting) (Bowens, Priscilla). (Entered: 09/27/2021)
Civil Cover Sheet
(#23) MOTION for Extension of Time to File Answer re #1 Complaint, by Fleet New York Metropolitan Regional Center LLC, Richard Xia, Julia Yue. (Gouraige, Herve) (Entered: 11/09/2021)
(#26) Letter MOTION for Extension of Time to File Recommendation re the Projects by Matthew Scott Peeler. (Peeler, Matthew) (Entered: 11/23/2021)
(#25) Consent MOTION to Adjourn Conference Stipulation and Proposed Order to Adjourn Show-Cause Hearing by Securities and Exchange Commission. (McGrath, Kevin) (Entered: 11/18/2021)
(#24) NOTICE of Appearance by Herve Gouraige on behalf of Fleet New York Metropolitan Regional Center LLC, Richard Xia, Julia Yue (notification declined or already on case) (Gouraige, Herve) (Entered: 11/15/2021)
(#23) MOTION for Extension of Time to File Answer re #1 Complaint, by Fleet New York Metropolitan Regional Center LLC, Richard Xia, Julia Yue. (Gouraige, Herve) (Entered: 11/09/2021)
DocketORDER: Monitor's #26 Letter Motion for Extension of Time to File is granted. Monitor shall submit his recommendation to the Court on or before January 28, 2022. Ordered by Judge Pamela K. Chen on 11/23/2021. (Mahkamova, Shirin) (Entered: 11/23/2021)
[-] Read LessDocket(#26) Letter MOTION for Extension of Time to File Recommendation re the Projects by Matthew Scott Peeler. (Peeler, Matthew) (Entered: 11/23/2021)
[-] Read LessDocketORDER: The #25 motion to adjourn the show-cause hearing previously scheduled for 12/8/2021, on consent of the parties, is granted, and the parties' stipulation is so ordered. The show-cause hearing is adjourned until 1/14/2022, 10:00 a.m., in Courtroom 4F North. Defendants and Relief Defendant shall file opposition papers by 12/23/2021, 5:00 p.m.; and the Commission shall file reply papers by 1/7/2022, 5:00 p.m. The relief granted in the 11 Order to Show Cause and 11 -1 Order Appointing Monitor is extended through January 14, 2022, in light of the schedule set forth herein. Ordered by Judge Pamela K. Chen on 11/19/2021. (Mahkamova, Shirin) (Entered: 11/19/2021)
[-] Read LessDocket(#25) Consent MOTION to Adjourn Conference Stipulation and Proposed Order to Adjourn Show-Cause Hearing by Securities and Exchange Commission. (McGrath, Kevin) (Entered: 11/18/2021)
[-] Read LessDocket(#24) NOTICE of Appearance by Herve Gouraige on behalf of Fleet New York Metropolitan Regional Center LLC, Richard Xia, Julia Yue (notification declined or already on case) (Gouraige, Herve) (Entered: 11/15/2021)
[-] Read LessDocketELECTRONIC ORDER re #23 : Granting Motion for Extension of Time to Answer Complaint. Defendants Fleet New York Metropolitan Regional Center LLC's and Richard Xia's answers are due on 11/30/2021. So Ordered by Chief Magistrate Judge Cheryl L. Pollak on 11/10/2021. (Henney, Scott) (Entered: 11/10/2021)
[-] Read LessDocket(#23) MOTION for Extension of Time to File Answer re #1 Complaint, by Fleet New York Metropolitan Regional Center LLC, Richard Xia, Julia Yue. (Gouraige, Herve) (Entered: 11/09/2021)
[-] Read LessDocketORDER granting #22 Motion to Appoint Expert. The Monitor's retention of J.S. Held is So Ordered. Ordered by Judge Pamela K. Chen on 11/3/2021. (Mahkamova, Shirin) (Entered: 11/03/2021)
[-] Read LessDocketORDER: In light of Judge Pollak's November 1, 2021 Order granting the #21 motion to withdraw as counsel for Defendants and Relief Defendant and directing new counsel to file a notice of appearance on the record by 11/15/2021, the Court sua sponte extends the deadline for Defendants and Relief Defendant to file opposition papers to 11/22/2021, 5:00 p.m.; the Commission shall file reply papers by 11/26/2021, 5:00 p.m. The show-cause hearing is hereby adjourned to 12/8/2021, 3:00 p.m, in Courtroom 4F North. The relief granted in the 11 Order to Show Cause and [11 -1] Order Appointing Monitor is extended through December 8, 2021, in light of the schedule set forth herein.Ordered by Judge Pamela K. Chen on 11/2/2021. (Mahkamova, Shirin) (Entered: 11/02/2021)
[-] Read LessDocketELECTRONIC ORDER re #21 : Granting Motion to Withdraw as Attorney. Attorneys Marc Lee Mukasey; Kenneth A. Caruso and Robert S. Frenchman terminated. Defendants have two weeks from the date of this Order, until 11/15/2021, for new counsel to file a notice of appearance on the record. So Ordered by Chief Magistrate Judge Cheryl L. Pollak on 11/1/2021. (Henney, Scott) (Entered: 11/01/2021)
[-] Read LessDocket(#10) In accordance with Rule 73 of the Federal Rules of Civil Procedure and Local Rule 73.1, the parties are notified that if all parties consent a United States magistrate judge of this court is available to conduct all proceedings in this civil action including a (jury or nonjury) trial and to order the entry of a final judgment. Attached to the Notice is a blank copy of the consent form that should be filled out, signed and filed electronically only if all parties wish to consent. The form may also be accessed at the following link: #http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO085.pdf. You may withhold your consent without adverse substantive consequences. Do NOT return or file the consent unless all parties have signed the consent. (Bowens, Priscilla) (Entered: 09/27/2021)
[-] Read LessDocket(#9) Summons Issued as to All Defendants. (Bowens, Priscilla) (Entered: 09/27/2021)
[-] Read LessDocket(#8) Unsigned Order to Show Cause by Securities and Exchange Commission (Bowens, Priscilla) (Entered: 09/27/2021)
[-] Read LessDocket(#7) DECLARATION Raymond Dookhie by Securities and Exchange Commission (Bowens, Priscilla) (Additional attachment(s) added on 9/27/2021: #1 Ex. 1, #2 Ex. 2, #3 Ex. 3, #4 Ex. 4, #5 Ex. 5, #6 Ex. 6, #7 Ex. 7, #8 Ex. 8, #9 Ex.9, #10 Ex. 10, #11 Ex. 11, #12 Ex. 12, #13 Ex. 13, #14 Ex. 14, #15 Ex. 15, #16 Ex. 16, #17 Ex. 17, #18 Ex. 18, #19 Ex. 19, #20 Ex. 20, #21 Ex. 21, #22 Ex. 22, #23 Ex. 23, #24 Ex. 24, #25 Ex. 25, #26 Ex. 26, #27 Ex. 27, #28 Ex. 28, #29 Ex. 29, #30 Ex. 30, #31 Ex. 31, #32 Ex. 32, #33 Ex. 33, #34 Ex. 34, #35 Ex. 35, #36 Ex. 36, #37 Ex. 37, #38 Ex. 38, #39 Ex. 39, #40 Ex. 40, #41 Ex. 41, #42 Ex. 42, #43 Ex. 43, #44 Ex. 44, #45 Ex. 45, #46 Ex. 46, #47 Ex. 47, #48 Ex. 48, #49 Ex. 49, #50 Ex. 50, #51 Ex. 51) (Bowens, Priscilla). (Entered: 09/27/2021)
[-] Read LessDocket(#6) DECLARATION Kim Han by Securities and Exchange Commission (Bowens, Priscilla) (Additional attachment(s) added on 9/27/2021: #1 Ex. 1, #2 Ex. 2, #3 Ex. 3, #4 Ex. 4, #5 Ex. 5, #6 Ex. 6, #7 Ex. 7, #8 Ex. 8, #9 Ex.9, #10 Ex. 10, #11 Ex. 11, #12 Ex. 12, #13 Ex. 13, #14 Ex. 14, #15 Ex. 15, #16 Ex. 16, #17 Ex. 17, #18 Ex. 18, #19 Ex. 19, #20 Ex. 20, #21 Ex. 21, #22 Ex. 22, #23 Ex. 23, #24 Ex. 24, #25 Ex. 25, #26 Ex. 26, #27 Ex. 27, #28 Ex. 28, #29 Ex. 29, #30 Ex. 30, #31 Ex. 31, #32 Ex. 32, #33 Ex. 33, #34 Ex. 34, #35 Ex. 35, #36 Ex. 36, #37 Ex. 37, #38 Ex. 38, #39 Ex. 39, #40 Ex. 40, #41 Ex. 41, #42 Ex. 42, #43 Ex. 43, #44 Ex. 44, #45 Ex. 45, #46 Ex. 46, #47 Ex. 47, #48 Ex. 48, #49 Ex. 49, #50 Ex. 50, #51 Ex. 51, #52 Ex. 52, #53 Ex. 53, #54 Ex. 54, #55 Ex. 55, #56 Ex. 56, #57 Ex. 57, #58 Ex. 58, #59 Ex. 59, #60 Ex. 60, #61 Ex. 61, #62 Ex. 62, #63 Ex. 63, #64 Ex. 64, #65 Ex. 65, #66 Ex. 66, #67 Ex. 67, #68 Ex. 68, #69 Ex. 69, #70 Ex. 70, #71 Ex. 71, #72 Ex. 72, #73 Ex. 73, #74 Ex. 74, #75 Ex. 75, #76 Ex. 76, #77 Ex. 77, #78 Ex. 78, #79 Ex. 79, #80 Ex. 80, #81 Ex. 81, #82 Ex. 82, #83 Ex. 83, #84 Ex. 84, #85 Ex. 85, #86 Ex. 86, #87 Ex. 87, #88 Ex. 88, #89 Ex. 89) (Bowens, Priscilla). (Entered: 09/27/2021)
[-] Read LessDocket(#5) DECLARATION Sunil K. Aggarwal by Securities and Exchange Commission (Bowens, Priscilla) (Entered: 09/27/2021)
[-] Read LessDocket(#4) DECLARATION Annie Seelaus by Securities and Exchange Commission (Bowens, Priscilla) (Entered: 09/27/2021)
[-] Read LessDocket(#3) DECLARATION Robert Thompson by Securities and Exchange Commission (Bowens, Priscilla) (Entered: 09/27/2021)
[-] Read LessDocket(#2) MOTION for Temporary Restraining Order by Securities and Exchange Commission. (Attachments: #1 Proposed Order Appointing Monitor, #2 Memorandum in Support) (Bowens, Priscilla) (Additional attachment(s) added on 9/27/2021: #3 Declaration David Stoelting) (Bowens, Priscilla). (Entered: 09/27/2021)
[-] Read LessDocket(#1) COMPLAINT against Fleet New York Metropolitan Regional Center LLC, Richard Xia, Julia Yue Was the Disclosure Statement on Civil Cover Sheet completed -No,, filed by Securities and Exchange Commission. (Attachments: #1 Civil Cover Sheet) (Bowens, Priscilla) (Entered: 09/27/2021)
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