FREQUENTLY ASKED QUESTIONS
Q. What is an Administrator?
The Administrator is an independent third party appointed by the Court to create and propose a plan for distributing funds collected from Defendants Xia and Fleet and Relief Defendant Yue under the Final Judgment in this Case, and to distribute those funds.
Q. What are the responsibilities of the Administrator here?
The Administrator shall, among other things:
(1) prepare and file with the Court a proposed distribution plan that proposes how funds collected under the Final Judgment will be handled, including how funds may be repaid to EB-5 Investors who want to be repaid and how other EB-5 Investors may attempt to stay invested in the EB-5 Program to continue to pursue their EB-5 immigrant visas;
(2) once the distribution plan is approved by the Court, take steps necessary to implement that plan;
(3) coordinate with the Tax Administrator to prepare accountings and ensure that the Fair Fund complies with all legal and regulatory requirements; and
(4) maintain accurate records concerning the Fair Fund distribution. (See Appointment Order at page 3.)
Q. Is the Administrator authorized to manage or operate assets of Defendant Xia and Fleet or Relief Defendant Yue other than the cash they pay to the Court’s CRIS, such as real estate they own?
No. The Administrator’s authority is limited to monitoring and distributing the funds collected from the Defendants in satisfaction of their monetary obligations under the Final Judgment.
Q. When is the Administrator required to submit his proposed distribution plan to the Court?
The Administrator shall submit his proposed distribution plan no later than 90 days after the issuance of the Appointment Order, unless that deadline is extended by the Court. (See Appointment Order at page 4.)
Currently, the Administrator shall submit his proposed distribution plan by November 1, 2024.
Q. What will be addressed in the Administrator’s proposed distribution plan?
The proposed distribution plan shall provide each EB-5 Investor with options related to his or her Settlement Share—that is, the EB-5 Investor’s pro rata share of the funds distributed under the settlement. In general, the Administrator expects to propose a distribution plan that permits each EB-5 Investor to choose among the following options, either: (1) to receive a direct payment of his or her Settlement Share; or (2) to direct the Administrator to send his or her Settlement Share back into the EB-5 Program so that the EB-5 Investor may attempt to continue to pursue his or her EB-5 immigrant visa in the EB-5 Program. With respect to the second option, the distribution plan may provide an option for each EB-5 Investor to direct the Administrator to pay his or her Settlement Share back to the NCE in which the EB-5 Investor originally invested related to the Eastern Emerald or Eastern Mirage Projects only if certain conditions are met by defendant Fleet. This includes that Fleet must be under new ownership, USCIS must not terminate or debar Fleet, and USCIS must approve Fleet’s application to be recertified as a regional center in the EB-5 Program. The distribution plan may also provide an option for each EB-5 Investor to direct the Administrator to pay his or her Settlement Share back to a different project in the EB-5 Program (other than the NCEs or related to Fleet), which would be an exercise of the EB-5 Investor’s Section M Rights. (See Appointment Order at page 5.)
Q. How much do Defendants Xia and Fleet and Relief Defendant Yue have to pay under the Final Judgment?
The Court’s Final Judgment requires the payment of disgorgement, prejudgment interest on that disgorgement, and civil money penalties totaling $272,140,380. In particular, Fleet and Xia are jointly and severally liable for disgorgement of $228,500,000 and prejudgment interest of $25,000,000, and Relief Defendant Yue is jointly and severally liable with Defendants for $14,000,000 of the above disgorgement amount and $720,000 of the above prejudgment interest amount. (See Final Judgment at 4.) Defendant Fleet is also liable for a civil penalty in the amount of $15,538,635, and Defendant Xia is liable for a civil penalty in the amount of $3,101,745. (See Final Judgment at 4.) Thus, the total that is to be paid into the CRIS account is at least $272,140,380: 228,500,000 + $25,000,000 + $15,538,635 + $3,101,745. Defendants Xia and Fleet and Relief Defendant Yue will also be required to pay some amount of post-judgment interest to be determined.
Q. When are defendants Xia, Fleet, and Yue required to pay CRIS?
The Court’s Final Judgment established the following payment schedule for Defendants Xia and Fleet, and Relief Defendant Yue to satisfy their monetary obligations under the Final Judgment.
1. $42,500,000 of Defendants’ funds currently frozen pursuant to the Court’s Preliminary Injunction Order Freezing Assets, dated December 8, 2022, will be paid to the Court’s CRIS upon the SEC’s motion (Final Judgment at page 5.) The SEC made this motion on August 26, 2024, and it is currently pending Court review and approval.
2. Defendant Xia and Fleet’s remaining monetary obligations and Relief Defendant Yue’s monetary obligations shall be paid to the Court’s CRIS no later than 245 days from the entry of the Final Judgment, i.e., March 26, 2025. (Final Judgment at page 6.)
Q. Who is involved in the Distribution besides the Administrator?
The Administrator’s team currently includes the Administrator and staff from the Administrator’s law firm, Seiden Law LLP. Additionally, the Administrator is currently interviewing other professionals (e.g. accounting and auditing professionals) who may provide consulting services for different areas of expertise required in this Case. Once the Administrator determines that certain professionals are necessary and qualified, he will file with the Court motions for approval to retain those professionals.
Q. When will the distribution start?
Currently, we do not know exactly when the distribution process will start. That process requires that the Administrator first file a proposed distribution plan, currently due to be filed by October 24, 2024; that the Court then review and approve that proposed plan; and that Defendant and Yue pay all amounts owed under the Final Judgment. Because Defendants and Yue are not required to make all payments required by the Final Judgment until March 26, 2025, the distribution process is likely to start after that date.
Q. When should I submit my claim and documents to the Administrator?
The Distribution Plan will establish a notice period for each EB-5 Investor. The Administrator will publicly announce the notice period on diversified channels such as newspapers, internet announcements, WeChat posts, and others. The Administrator will also attempt to provide notice directly to each EB-5 Investor. Each EB-5 Investor shall then follow the Court-approved distribution plan and submit his/her claims within the time frame set forth by the Court.
Q. Can I submit my information and documents right now?
No. Please do not submit your information and documents right now. Instead, please follow the instructions and requirements of the Administrator’s distribution plan, which is currently due to be filed with the Court on October 24, 2024. The Administrator’s team will start to collect and review EB-5 Investor’s submissions upon the conclusion of the submission schedule set forth by the distribution plan.
Q. Can I get some of my money back now?
No. All funds must remain frozen and within the Court’s CRIS account until the Court authorizes otherwise.
Q. Will I get all of my money back?
Currently, we cannot estimate how much each EB-5 Investor might receive. The Final Judgment gives the Defendants and Yue until March 26, 2025, to pay all money they owe under the Final Judgment. The amount eligible to be paid to each EB-5 Investor will depend on Defendants and Yue meeting their payment obligations under the Final Judgment or other efforts by the SEC to collect funds from them. The Administrator lacks sufficient information to determine the percentage of the recovery for each EB-5 Investor at this time.
Q. What about my immigration status?
Although the Administrator intends to engage an immigration expert to support his work, neither the Administrator nor the potential immigration expert is in a position to provide any legal advice in response to an EB-5 investor’s specific questions seeking legal advice related to his or her immigration status. We recommend that each EB-5 investor consult with his or her own immigration counsel in connection with his or her specific immigration law questions and/or that each EB-5 Investor contact the United States Immigration and Citizenship Services, which runs the EB-5 Program. The Administrator’s office can provide necessary support in assisting EB-5 Investor’s immigration counsel’s work within the scope of the Administrator’s authority and responsibilities under the Appointment Order.
Q. How can I stay informed of progress in this Case?
Under the Appointment Order, the Administrator must update his work status by filing periodic reports to the Court. Investors can review the Administrator’s status reports on the Court’s docket system. In addition, the Administrator will update the case status on his law firm’s official website at www.FleetNYFairFund.com and send out the same reports to the investors who have contacted him through eb5@seidenlaw.com as necessary.
Q. Does the Administrator represent me?
No. The Administrator is not your lawyer and does not represent you. Accordingly, he cannot provide you with legal advice. He is the Court’s agent, and he is effectuating the provisions of the Court’s orders.
Q. Should I hire a lawyer?
You certainly have the right to hire or consult with your own lawyer. Please be aware that neither the Administrator nor his team represent you in this Case nor can they provide any legal advice to you in response to your questions that ask for legal advice.
Q. Who should I contact for questions regarding the fund distribution?
All inquiries regarding the Fund Distribution should be sent to eb5@seidenlaw.com
Q. When should I expect to receive a response from the Administrator?
Given the volume of investors involved in this Case, please allow 7 business days for the Administrator to respond to your questions.