Yesterday, the Securities and Exchange Commission (SEC) charged Nadim Ahmed and the EB-5 qualified businesses he represents, NuRide Transportation and NYC Green Transportation, with making “fraudulent misrepresentations in securities offerings to investors seeking permanent residency through the EB-5 Immigrant Investor Program.”
The SEC has also charged New York-based attorney Mona Shah and her eponymous immigration law firm with “offering unregistered securities to investors in offerings that raised more than $66 million from more than 100 investors.”
The SEC’s complaint maintains that, in the years 2014 to 2018, Ahmed and his companies falsely told EB-5 investors that NYC Green would operate according to EB-5 program requirements and that the company’s principals had contributed $11 million to the company. Moreover, the SEC charges Ahmed, NuRide, and NY Green “put key revenue-generating contracts in NuRide’s name despite telling investors that NYC Green would be the operating transportation business.”
The SEC further alleges that Ahmed, his companies, as well as Shah and her law firm, offered or sold unregistered securities, “including to individuals residing in the United States, in three offerings, for which no exemption to the registration requirements was available.”
The SEC’s complaint also holds that, to date, “none of the investors in the offerings have received unconditional permanent residency status or a return of their investment.”
“All offering materials, including those provided to investors seeking residency under the EB-5 program, must contain accurate disclosures about the securities being issued,” said Thomas P. Smith, Jr., Associate Regional Director in the New York Regional Office. “And all securities offerings must comply with the registration requirements or the exemptions to those requirements.”
The SEC seeks “permanent and conduct-based injunctions, disgorgement, prejudgement interest, and civil penalties.”
“We are confident that we will prevail in court”
Contacted by IMI, Mona Shah, who has been a prominent member of the EB-5 community for many years and who also runs the popular EB-5 Investment Voice podcast, provided a statement from her firm in which it responded to the charges.
Shah, said the statement, was “troubled by the allegations by the Securities and Exchange Commission that Mona Shah & Associates Global, Mona Shah, and the Gravitas NYC Regional Center purportedly ran afoul of Section 5 of the Securities Act. MSA has long prided itself on the quality and integrity of its services and staff. MSA goes to great lengths to ensure compliance with federal, state, and local laws and regulations,” reads the statement.
“It is disappointing that the SEC has made these allegations, which we are confident we will prove wrong,” said Shah, who also remarked that the SEC’s complaint had followed a rushed investigation based on incomplete information. The statement also pointed out that the SEC did not allege fraud against Shah, her firm, or the Gravitas regional center, but “instead alleges that their securities offerings failed to comply with the technical exemptions from registration.”
The SEC’s complaint, continued the statement, “is likely to have troubling consequences for the investors. MSA has spent thousands of hours fighting for the investors in these projects. The SEC’s complaint now creates serious risks as to whether USCIS will adjudicate the petitions on the evidence provided and merits or on the SEC’s opinion.”
The SEC’s case against Shah, MSA, and Gravitas centers on a purported lack of accreditation among the investors rather than fraud, broker-dealer violations, or solicitation of investors, claims Shah and MSA believe are unfounded and not supported by the evidence.
“We are confident that we will prevail in court, given the strength of our legal and factual arguments,” Shah said. “Hopefully, this case will set a precedent that will demonstrate that this kind of sweeping complaint has no merit.”
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