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Thursday, Jun 8, 2023

Ex-Attorney Fined $8.3 Million for Visa Scheme

Former L.A. immigration attorney Justin M. Lee, who used a federal visa program to defraud dozens of investors, must pay the Securities and Exchange Commission $8.3 million after a court judgment, the federal agency announced last week.

Lee, through his Koreatown law firm, defrauded two dozen investors participating in the EB-5 visa program, which allows foreigners to obtain green cards if they invest between $500,000 and $1 million in U.S. projects that create jobs for Americans, the SEC said.

Yet the saga surrounding Lee – first reported by the Business Journal more than two years ago – is still not entirely over.

Criminal charges against Lee, which were filed by the Justice Department simultaneously with the SEC’s civil complaint in September of last year, are still pending in federal court. But that case doesn’t appear likely to move forward any time soon.

That’s because Lee is still serving a prison sentence in South Korea after he was convicted there of defrauding local investors as part of the EB-5 scheme, said Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles.

It’s unclear if or when the United States might be able to extradite Lee, which would be required before the Justice Department could proceed with its prosecution. The SEC, on the other hand, did not need Lee to be in the country to proceed with its civil lawsuit.

The commission, however, still has to figure out whether Lee has any assets in the United States that it could collect, said Karen Matteson, an attorney in the SEC’s L.A. office.

Lee’s legal troubles first began during summer 2013, when he was arrested in South Korea. Before then, he was considered a pioneer of the EB-5 program.

Lee, who was once invited to speak before members of Congress, had pledged to build biofuel projects throughout the United States using hundreds of millions of dollars from foreign investors seeking U.S. residency.

The popularity of the EB-5 program, which is run by the U.S. Citizen and Immigration Services, grew significantly in the wake of the recession as developers sought alternative ways to fund projects. EB-5 money has helped bankroll several L.A. projects and the program has helped thousands of immigrants receive green cards. At the same time, though, it has been criticized for poor oversight and possible abuse.

Meantime, the immigration department received more EB-5 applications – 14,373 – during its last fiscal year ended Sept. 30 than any other year. Nearly half of those came during the fourth quarter, according to the department’s most recent report published this month.

The sudden increase came just as Congress is gearing up to decide whether to extend the EB-5 program, which was launched 25 years ago. If the government doesn’t extend the program, it would expire Dec. 11.

Top Scorers

Human Rights Campaign Foundation this month published its annual corporate equality index, which is used by many businesses to evaluate the level of inclusion of lesbian, gay, bisexual and transgender people in the workplace.

More than 850 companies participated in this year’s survey, nearly half of which received a perfect score. The foundation began publishing its report in 2002, using criteria such as nondiscrimination policies, employment benefits and public commitment to LGBT equality to rate participating businesses.

The legal industry boasted the highest number of perfect scores, with 95 law firms earning 100-point scores this year. The index included results from 156 law firms, which includes the majority of the top-grossing firms in the United States.

“The legal field continues to distinguish itself as the sector with the most top-rated employers, consistently demonstrating a strong commitment to workplace equality,” Deena Fidas, the foundation’s director of its workplace equality program, said in a statement.

Four law firms headquartered in downtown Los Angeles were among those earning a perfect score: Munger Tolles & Olson, Paul Hastings and Sheppard Mullin Richter & Hampton and O’Melveny & Myers.

Legal Landscape

Gibson Dunn & Crutcher has promoted Douglas M. Champion, Heather L. Richardson and Benyamin S. Ross to partnerships in the firm’s downtown L.A. office effective Jan 1. Champion practices real estate and land-use law, Richardson focuses on health care litigation and Ross specializes in mergers and acquisitions. … Loeb & Loeb has elected five new partners in its Century City office: Kevin Garlitz, an entertainment attorney; Melanie J. Howard, an advanced media and technology attorney; Amy L. Koch, a trust-and-estates litigator; Paul P. Sagan, an entertainment lawyer; and Erin M. Smith, a labor and employment attorney. … James J. Thompson, former partner at Snell & Wilmer, has joined the downtown L.A. office of Sheppard Mullin as a partner in the firm’s corporate practice group. … Downtown L.A.’s Adli Law Group has hired William Ceravone as a litigation assistant and Dana DiBartelo as a litigation paralegal.

Staff reporter Cale Ottens can be reached at cottens@labusinessjournal.com or (323) 549-5225, ext. 221.

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