Tuesday, July 24, 2018

Another EB-5 Regional Center Failure: Imperial Regional Center




The goal of the EB-5 regional center was to develop a 78-acre commercial center (“Imperial Center”), in the unincorporated town of Heber, in Imperial County, California, containing over one million square feet of building area, mostly focused on retail, wholesale and food and beverage operations, with a hotel, cinema, and public space. There are 135 Chinese investors who have supplied $67.5 million in funds in order to secure a U.S. green card. The first phase of the center, which was an ARCO gas station and AM/PM Minimart, has been successful.  The second phase consisted mostly of food and beverage operations, including 4 restaurants and a nightclub. All are open now. The third phase has not started, and an aerial map from March 21, 2015 shows no further development since that time more than 3 years ago.
On May 11, 2018, Imperial County filed a complaint against Pacificland International Development, the company operating Imperial Regional Center, and its Chief Executive James Lo after failing to make first payment on a $2.2 million loan from Imperial County’s Community Benefit Program, failing to pay property taxes of $252,700, failing to pay contractors $354,000, and having $607,000 in liens placed against the property. On May 24 Judge Jeffrey Jones granted the county’s request to appoint a receiver to take possession and control of Imperial Center.
An aggrieved Chinese investor hired me to investigate the situation and do background checks on CEO “James” Chun Nan Lo and his wife. Both had three “unspecified” criminal convictions in Riverside County, California, but more investigation was needed to determine if their crimes were relevant to being entrusted with $67.5 million in investor funds. Mr. Lo also previously had a tax lien from the State of California as well as a civil judgment against him. Their main home was also in loan default from 2009 to 2012, when they were running this center, and then their loan problem went away.
Mr. Lo also owned several other companies, one of which is “Veggie & Tea House”. A “Veggie and Tea House” truck was on site during my inspection, making me believe that he and his wife were the restaurant suppliers to the center, a possible conflict of interest, and maybe the reason why this fledgling center already has 5 food and beverage operations.
If Imperial Regional Center is not paying its loans or property taxes or contractors, perhaps some of its income is being diverted to the Lo family through Veggie & Tea House.




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