SEC v. RICHARD XIA; and FLEET NEW YORK METROPOLITAN REGIONAL CENTER, LLC, No. 1:21-cv-05350, Eastern District of New York (Sept. 28, 2021) — Complaint

RICHARD R. BEST
REGIONAL DIRECTOR
Lara S. Mehraban
Judith Weinstock
Kevin P. McGrath
David Stoelting
Brenda Chang
Kim Han
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0174 (Stoelting)
[email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

RICHARD XIA, a/k/a YI XIA, and
FLEET NEW YORK METROPOLITAN
REGIONAL CENTER, LLC, f/k/a FEDERAL
NEW YORK METROPOLITAN REGIONAL
CENTER, LLC,

                                             Defendants,

                         -and-

JULIA YUE, a/k/a JIQING YUE,

                                             Relief Defendant.

COMPLAINT

21 Civ. _____ (       )

JURY TRIAL DEMANDED

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Plaintiff Securities and Exchange Commission (“SEC”), for its Complaint against
Defendants Richard Xia, a/k/a Yi Xia (“Xia”), and 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”), alleges as follows:
SUMMARY
1. 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.
2. The Defendants enticed predominantly Chinese foreign nationals to make
investments of $500,000 each to fund two large, mixed-use real estate projects that were to be
built in Queens, NY.  Xia named them the “Eastern Mirage Project,” located at 42-31 Union
Street, and the “Eastern Emerald Project,” located at 112-51 Northern Boulevard.  In their
offering materials, the Defendants represented that the investor funds would be used to build two
five-star hotels, a modern conference center, luxury residences, retail stores, a top-shelf
restaurant, vast underground parking garages, and a medical center.
3. 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.  See Exhibits A and B hereto (photographs of the
Eastern Mirage and Eastern Emerald sites taken on September 14, 2021).  The funds for the
Eastern Mirage Project have been exhausted far short of completion of the project.  And only

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approximately $77 million is left for construction of the Eastern Emerald Project, far short of the
amount the Defendants had estimated would be needed to complete the construction of the
project.
4. The Defendants pitched the investments in the projects as a way for investors to
participate in the EB-5 Program administered by the United States Citizenship and Immigration
Services (“USCIS”), which allows foreign nationals to qualify for permanent residency if they
make a qualified investment of $500,000 or more in a specified project that is determined to
create or preserve a certain number of jobs for United States workers.
5. The terms of the Eastern Mirage and Eastern Emerald offerings were generally
the same.  Each investor made a $500,000 capital contribution to a limited partnership; a
processing fee of $50,000 was also required.  The investors’ funds were required to be loaned to
the projects’ developers, who were affiliates of Fleet, and used only for project-specific
purposes.  Each investor became a limited partner, and the General Partner (Fleet) had complete
control over the offerings.  The investors were told that their $500,000 capital contributions
would be returned to them when the loan matured.
6. The primary offering documents were the Private Offering Memoranda
(“Offering Memoranda”), which included Limited Partnership Agreements (“LP Agreements”),
and Business Plans, which Xia reviewed and approved, and various marketing materials.  These
documents contained numerous material misrepresentations and omissions.  First, Defendants
represented to investors that their $500,000 capital contributions would be used only for the
construction and operation of that specific project.  Instead, Defendants repeatedly
misappropriated money from one project and used it for another.  For example, Defendants used
approximately $17 million in Eastern Mirage investor funds to purchase the Eastern Emerald

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land; and used at least $11.8 million in Eastern Emerald investor funds for Eastern Mirage
project construction.  Xia also misappropriated investor funds for personal and other improper
expenses.
7. Second, the Defendants represented to investors that the projects would be
“funded from a variety of sources,” including not only EB-5 funds but also government bonds,
loans from banks and a broker-dealer, as well as substantial equity contributions from Xia.
These representations were false, which Defendants knew or were reckless in not knowing were
not true.  In fact, EB-5 investor money was essentially the only source of funding, which created
a significant funding shortfall that Defendants knew or should have known was inevitable.
8. Third, the Defendants told investors that the “Management and Development”
team for the projects consisted of Xia and the Racanelli Construction Group, Inc. (“Racanelli”).
The Offering Memoranda stated that Racanelli was “one of the region’s leading providers of
preconstruction planning, project management, design/build, and general contracting services,”
and that Racanelli, “[s]ince its founding,” had completed numerous projects, including
“corporate headquarters, industrial complexes, hospitals,” and many other types of buildings.
The Business Plans and marketing brochures further represented that Racanelli had “six decades”
of construction experience.  None of this was true.  In fact, Racanelli was created in 2011 and
had no track record other than serving as Xia’s in-house construction company.  Moreover, the
description of Racanelli’s experience was lifted almost verbatim from the website of another
construction company, Racanelli Construction Company Inc. (the “Original Racanelli”), whose
name and reputation Defendants sought to co-opt by appropriating its name for their construction
entity.  While the Offering Memoranda and Business Plans extol Xia as having extensive
experience in real estate development, Xia himself had limited experience as a developer—

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before Eastern Mirage he had completed construction of only one small apartment building—and
he was ill-equipped to manage the construction of the large-scale projects, as Defendants knew
or should have known.
9. Fourth, the Defendants told investors that the hotels that were part of the projects
would be affiliated with the well-known Westin Hotel chain, which Defendants knew was not
true.
10. Fifth, the Defendants intentionally exaggerated the size of the Eastern Emerald
Project.  The Defendants told investors that the project would cover more than 1.1 million square
feet, but Defendants knew this was false.  Documents submitted to the Department of Buildings
in 2015, and signed by Xia, show that Xia only sought approval to build a project of about
350,000 square feet.
11. Finally, the Offering Memoranda stated that there were “no material conflicts of
interest between the General Partner and its affiliates on the one hand and the Partnership on the
other hand” and that the General Partner “is accountable to the Partnership as a fiduciary and
consequently must exercise good faith and integrity in handling the Partnership’s affairs.”  As
the President, Chief Executive Officer and Managing Member of the General Partner, Xia had a
fiduciary duty to the Partnerships.  However, Defendants failed to disclose material conflicts of
interest to the investors.  Specifically, Xia, who was on both sides of the agreements, caused the
developers of the Eastern Mirage and Eastern Emerald Projects to enter into rental agreements
with the entities that own the land for the projects.  The developers have never made any rental
payments and have been in default for years: one owes at least $16.5 million and the other owes
at least $42.2 million.  Because Xia owns and controls all four entities – the developers and the
owners of the land – and can exercise his right to demand payment at any time, Xia has the

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unfettered right to trigger the default provisions in the rental agreements that would bankrupt the
developers and leave the investors empty-handed.  Alternatively, if the projects are sold, Xia
could enforce the nearly $60 million in payment obligations the developers owe, which will
reduce the amount available for the developers to return to investors.
12. To further the Defendants’ scheme and conceal their conduct, Xia opened more
than 150 bank accounts which he controlled and through which investor funds flowed.  Although
Yue is a signatory or co-signatory (with Xia) on many of these accounts, she appears to act
primarily at Xia’s direction.  Xia has exercised this control to direct numerous transfers between
and among these accounts in circular, multi-step transactions that appear to have no legitimate
business purpose.  Xia directed over $127 million in investor funds to Racanelli and another
general contractor he controls.  Of that amount, Xia re-directed a total of at least $85.9 million to
accounts of other entities he controls.  Of the $85.9 million, there are no invoices or other
support for approximately $43.6 million of these transfers.  Moreover, the invoices from Xia’s
entities to the general contractors ostensibly supporting approximately $32.2 million of the
transfers appear spurious.  Additionally, the majority of this money does not appear to have been
spent on Project-related expenses.
13. 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.
14. The investors remain at significant and immediate risk.  Since 2018, many
investors have been demanding the return of their funds, including through lawsuits.  To date, no
investor has received his or her capital contributions back.  And given that the projects consist of

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an unfinished building and a hole in the ground with insufficient funds to complete either project,
the prospects for investors to receive their capital contributions back are remote at best.
15. Moreover, Xia and his companies are currently under significant financial
exposure, including from a dozen pending project-related lawsuits brought by EB-5 investors,
injured workers, unpaid contractors, ConEdison, and the City of New York.  In May 2021, Xia
wrote to some investors to say that he was planning the “termination and dissolution” of one of
the limited partnerships.  And in recent months, Xia has offered payments to some investors to
settle pending litigations, stating that he may wind up some of the limited partnerships.
16. 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.  For
example, in May 2021, Xia used $10 million of investor funds as collateral to secure a bank line
of credit in the name of EEG, and siphoned off $5.6 million off to Yue’s personal account (see
supra paragraph 13).
17. As a result, the SEC seeks several forms of emergency and preliminary relief,
including an asset freeze, the appointment of a Monitor, sworn accountings, and expedited
discovery.
VIOLATIONS
18. By virtue of the foregoing conduct and as alleged further herein, Defendants Xia
and Fleet have violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C.
§ 77q(a)], and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15

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U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
19. Yue, the Relief Defendant, has received at least $9.7 million in ill-gotten gains
from the Defendants’ fraud.
20. Unless Defendants are restrained and enjoined, they will continue to engage in the
acts, practices, transactions, and courses of business set forth in this Complaint or in acts,
practices, transactions, and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
21. The SEC brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act
Sections 21(d) [15 U.S.C. § 78u(d)] and 21A(a) [15 U.S.C. § 78u-1(a)].
22. The SEC seeks a final judgment: (a) permanently enjoining Defendants from
violating the federal securities laws and rules that this Complaint alleges they have violated;
(b) ordering Defendants and Relief Defendant to disgorge all ill-gotten gains they received as a
result of the violations alleged herein and to pay prejudgment interest thereon; (c) ordering
Defendants to pay civil money penalties pursuant to Securities Act Section 20(d) [15 U.S.C.
§ 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; and (d) ordering any other
and further relief the Court may deem just and proper.
23. To maintain the status quo and preserve assets sufficient for Defendants to pay
disgorgement, prejudgment interest, and civil money penalties and for Relief Defendant to pay
disgorgement and prejudgment interest in accordance with any final judgment of this Court, the
SEC further seeks emergency relief during the pendency of this action, including: (a) an asset
freeze; (b) the appointment of a Monitor; (c) sworn accountings; and (d) expedited discovery.

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JURISDICTION AND VENUE
24. This Court has jurisdiction over this action pursuant to Securities Act Section
22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
25. Defendants, directly and indirectly, have made use of the means or
instrumentalities of interstate commerce or of the mails in connection with the transactions, acts,
practices, and courses of business alleged herein.
26. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)]
and Exchange Act Section 27 [15 U.S.C. § 78aa].  Defendants may be found in, are inhabitants
of, or transact business in the Eastern District of New York, and certain of the acts, practices,
transactions, and courses of business alleged in this Complaint occurred within this District.
DEFENDANTS
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27. Xia, age 52, a resident of Flushing, NY, is the co-owner, CEO, President, and
Managing Member of Fleet.  Xia attended a university in China where he obtained a degree in
industrial management engineering.  Xia also has a master’s degree from the University of
Alabama.  Xia immigrated to the United States in 1996 and became a United States citizen four
years ago.  Xia owns (or co-owns with his wife, Relief Defendant Yue) and controls all the
entities listed in paragraphs 31-48 (the “Xia Entities”).
28. Fleet, a New York limited liability company, was formed by Xia on February 5,
2010.  The USCIS, part of the U.S. Department of Homeland Security, approved Fleet for
designation as a regional center in the Immigrant Investor Program on October 7, 2010.  Fleet is

1
  Defendants Xia and Fleet entered into tolling agreements that tolled and suspended the
running of any statute of limitations for the period beginning September 10, 2019 through March
9, 2020.

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the General Partner for the five limited partnerships listed in paragraphs 31-36.
29. Xia acted by and through Fleet and, accordingly, Xia’s conduct should be imputed
to Fleet.
RELIEF DEFENDANT
30. Yue, age 41, a resident of Flushing, NY, is the wife of Xia.  Yue was also the
authorized signatory on dozens of bank accounts and she authorized funds transfers and signed
lease and loan agreements on behalf of various entities that Xia owns and controls.  See Exhibit
C (list of Xia-controlled bank accounts and signatories).  It appears that Yue acted primarily at
Xia’s direction.
OTHER RELEVANT ENTITIES
The Limited Partnerships and the Developers (FFG, EEG, and LaGuardia)
31. EMMCO, L.P. (“EMMCO”) is a New York limited partnership formed by Xia
on April 9, 2010.  Under a Loan Agreement dated July 14, 2010, EMMCO agreed to loan $8
million in EB-5 investor funds, at 0% interest, to Fleet Financial Group, Inc. (“FFG”), a New
York corporation owned and controlled by Xia, so that FFG could “develop [and] construct
Phase I” of the Eastern Mirage Project, referred to as the “Eastern Mirage Center.”  Phase I was
supposed to include a “conference center, spa/fitness center, restaurant and parking garage.”
Yue signed the Loan Agreement for EMMCO and Xia signed for FFG.
32. EMMCO NQMC, L.P. (“EMMCO NQMC”) is a New York limited partnership
formed by Xia on December 22, 2010.  Under a Loan Agreement dated June 26, 2013, EMMCO
NQMC agreed to loan $35.5 million in EB-5 investor funds, at 0% interest, to FFG so that FFG
could “develop [and] construct Phase II” of the Eastern Mirage Project, referred to as the “North
Queens Medical Center.”  Phase II was supposed to include a “state of the art medical facility.”

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Yue signed the Loan Agreement for EMMCO NQMC and Xia signed for FFG.
33. EMMCO TOWER, L.P. (“EMMCO TOWER”) is a New York limited
partnership formed by Xia on June 10, 2011.  Under a Loan Agreement dated December 8, 2014,
EMMCO TOWER agreed to loan $12.5 million in EB-5 investor funds, at 0% interest, to FFG so
that FFG could “develop [and] construct Phase III” of the Eastern Mirage Project, which was
supposed to be a luxury hotel.  Yue signed the Loan Agreement for EMMCO TOWER and Xia
signed for FFG.
34. EEGH, L.P. (“EEGH”) is a New York limited partnership formed by Xia on
December 6, 2013.  Under a Loan Agreement dated December 18, 2013, EEGH agreed to loan
$80 million in EB-5 investor funds, at 2% interest, to Eastern Emerald Group, LLC (“EEG”),
a Delaware limited liability company formed by Xia on December 6, 2013 for the development
of the Eastern Emerald Project.  In June 2018, Xia changed the name of EEG to The Grand
Eastern Mirage Group LLC.  The loan to EEG was supposed to allow EEG to “develop,
construct and operate a commercial mixed-use project that includes a 5-star hotel, convention
center, parking garage, restaurant and retail space.”  Xia signed the Loan Agreement for EEGH
and Yue signed for EEG.
35. An “Amendment No. 1” to the EEGH-EEG Loan Agreement, dated October 21,
2015, increased the loan from $80 million to $110 million.  Xia signed Amendment No. 1 to the
Loan Agreement for both EEGH and EEG.
36. EEGH II, L.P. (“EEGH II) is a New York limited partnership formed by Xia on
September 10, 2015.  Under a Loan Agreement dated October 18, 2015, EEGH II agreed to loan
“up to $80 million” in EB-5 investor funds, at 1% [or 2%] interest, to LaGuardia Performance
Center, LLC (“LaGuardia”), a Delaware limited liability company formed by Xia on September

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25, 2015, for the development of the expansion of the Eastern Emerald Project.  The loan was
supposed to allow LaGuardia to “develop, construct and operate the expansion to a 5-star hotel,
which will result in an additional 556,398 SF being added to the overall building, an additional
294 5-star luxury hotel rooms, an additional 4 floors added to the building; a performing arts
center across 5 floors; as well as additional retail space, restaurant space and parking garage
space.”  Xia signed the Loan Agreement for EEGH II and Yue signed for LaGuardia.
37. The EMMCO, EMMCO NQMC and EMMCO TOWER Offering Memoranda
stated that the loans mature “five (5) years from the date of the first advance under the loan,”
which would have been in August 2015 for EMMCO, April 2016 for EMMCO NQMC, and
December 2018 for EMMCO TOWER.
38. The EEGH and EEGH II Offering Memoranda stated that the loans for the
Eastern Emerald Project mature “at the date of (1) five (5) years from the date of the last advance
under the loan, or (2) the date all EB-5 investors have ceased participating in the EB-5 program,
whichever is later.”
39. The borrowers (FFG, EEG, and LaGuardia), which are the developers that Xia
also owns and controls, have not made any loan repayments to the limited partnerships.
Additional Entities Xia Owns, Co-Owns and/or Controls
40. Amazon River, LLC (“Amazon River”), a Delaware limited liability company
formed on June 29, 2015, is owned and controlled by Xia.
41. Fleet General Insurance Group Inc. (“Fleet Insurance”), a Vermont corporation
created on October 13, 2017, is owned and controlled by Xia.
42. JiQing Development, Inc. (“JiQing Development”), a New York corporation
formed on July 28, 2005, is co-owned by Xia and Yue and controlled by Xia.

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43. Manekineko Group, LLC (“Manekineko Group”), a New York limited liability
company formed on February 3, 2010, is owned and controlled by Xia.
44. Perini Group, Inc. (“Perini”), a New York corporation formed on December 2,
2015, is controlled by Xia.
45. Racanelli, a New York corporation formed on June 21, 2011, is controlled by
Xia.
46. Shangri-La 9D, Inc. (“Shangri-La 9D”), Shangri-La 9F, Inc. (“Shangri-La
9F”), and Shangri-La Green, Inc. (“Shangri-La Green”), New York corporations formed on
March 8, 2010, are owned and controlled by Xia.
47. Samuel Development Group, LLC (“Samuel Development”), a New York
limited liability company formed on August 3, 2005, is owned and controlled by Xia.
48. X & Y Development Group, LLC (“X&Y”), a New York limited liability
company formed on September 20, 2007, is owned and controlled by Xia.  In 2007, X&Y
acquired the Eastern Emerald Project land on Northern Boulevard in Queens, NY.
FACTUAL ALLEGATIONS
I. The Securities Offerings and the Structure of the Limited Partnerships
49. From early 2010 through late 2017, through five separate offerings, the
Defendants solicited EB-5 Program investments in two mixed-use real estate projects: the
Eastern Mirage Project and the Eastern Emerald Project.
50. The EMMCO offering, from August 2010 through January 2014, raised $8
million from 16 EB-5 Program investors.  According to its Offering Memorandum, the EMMCO
funds were to “be used to finance Phase I of the Eastern Mirage Project,” described as the
“Eastern Mirage Center,” which was to include a spa and fitness center, a multimedia conference

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center, a restaurant, and a public parking garage with 256 parking spaces.  The Offering
Memorandum further stated that the Easter Mirage Center “will be completed and be generating
income and creating jobs by the third or fourth quarter of 2012.”
51. The EMMCO NQMC offering, from January 2011 through April 2012, raised
$35.5 million from 75 EB-5 Program investors.  According to its Offering Memorandum, the
EMMCO NQMC funds were to be used “to finance Phase II of the Eastern Mirage Project,”
consisting of “the North Queens Medical Center [which] will be completed and be generating
income and creating jobs by the third or fourth quarter of 2013.”
52. The EMMCO TOWER offering, from December 2011 through January 2014,
raised $12.5 million from 25 EB-Program investors.  According to its Offering Memorandum,
the EMMCO TOWER funds were to be used “to finance Phase III of the Eastern Mirage
Project,” consisting of the Eastern Mirage Tower [which] will be completed and be generating
income and creating jobs by the third or fourth quarter of 2013.”
53. The EEGH offering, from March 2014 through December 2015, raised $110
million from 220 EB-5 Program investors.  According to its Offering Memorandum, the EEGH
funds were to be used “to finance the development, construction and operation” of the Eastern
Emerald Project, consisting of “a 498-room 5-star luxury hotel, retail stores (97,180 square feet),
and IAC certified international conventional [sic] center (105,964 square feet), a restaurant
(11,300 square feet), and a parking garage with 400 parking spaces covering 82,490 square feet.”
54. The EEGH II offering, from October 2015 to October 2017, raised $63 million
from 126 EB-5 Program investors.  The Offering Memorandum for EEGH II described a
significant “expansion” of the Eastern Emerald Project from the 643,180 square feet in the
“original building” to 1,199,578 square feet.  According to the EEGH II Offering Memorandum:

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“The completed building will have a total of 792 5-star luxury hotel rooms equal to 730,049 SF
across all 29 floors; as well as a 1-story, 105,964 SF convention center; a 5-story, 78,954 SF
performing arts center; 136,269 SF of retail space across 6 floors; 57,531 SF of restaurant space
across 5 floors; and a 1-story, 90,811 SF parking garage.”
55. Investors in each of the five offerings were solicited with an Offering
Memorandum, which included and incorporated the LP Agreement, a Business Plan, and other
marketing materials.  Xia reviewed the Offering Memorandum and the Business Plan for each
offering.  He had final authority to approve these documents, and he approved them for
distribution to investors.
56. The investments, which were structured as limited partnership “units,” are
securities.
57. The Offering Memoranda all stated that the “investors investing under the EB-5
Program will become Limited Partners of the Partnership by (i) completing and delivering the
subscription documents, including the Subscription Agreement and the Investor Questionnaire,
in the forms attached hereto as Exhibit IV, which may be accepted by the General Partner in its
sole discretion, (ii) executing and delivering a counterpart signature page to the Partnership
Agreement, and (iii) making a capital investment in the Partnership Agreement in the amount of
US$500,000, along with a processing fee in the amount of US$50,000.”  The offices of the
Partnership and the General Partner were identified in the Offering Memoranda as being located
in Flushing, New York.
58. The Offering Memoranda all stated that the investors’ capital contributions are
intended to be used for a loan to the respective developer to finance the phase of the project for
which the funds were raised.  The Offering Memoranda further provided that the “Borrower

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intends to repay the loan at maturity with the proceeds of long term financing or from other
sources.”
59. Although the loans from EMMCO, EMMCO NQMC and EMMCO TOWER to
Fleet were at zero percent interest, the investors had an expectation of profit.  The Offering
Memoranda for the Eastern Mirage offerings provided that “net proceeds (if any) realized from
the distribution of profit realized from the Partnership’s investment, sale, exchange or other
disposition of the business of the Partnership or any portion thereof, will be allocated and
distributed 100% to the Limited Partners up to the amount of each Limited Partner’s original
capital contribution.  Thereafter, such amounts will be allocated and distributed 99% to the
General Partner and 1% to the Limited Partners.  Interest income, after deducting Partnership
expenses will be allocated and distributed 99% to the General Partner and 1% to the Limited
Partners.”
60. The EB-5 funds raised from the EEGH and EEGH II offerings were loaned at 2%
interest to EEG and LaGuardia, respectively, for development of the Eastern Emerald Project.
The Offering Memoranda for the Eastern Emerald offerings provided that “net proceeds (if any)
realized from the distribution of profit realized from the Partnership’s investments will be
allocated and distributed 90% to the Limited Partners and 10% to the General Partners.”
61. The EB-5 Program investors were passive, and any returns they received would
come not from their efforts but from the efforts of Xia, Fleet and other entities Xia controlled.
II. Xia Controlled Fleet and the Limited Partnerships
62. The LP Agreements gave Xia, as the President, CEO and Managing Member of
the General Partner Fleet, broad and expansive authority to act on behalf of each Partnership, to
represent and bind each Partnership, and “to do any and all things necessary for, incidental to or

17
connected with carrying out the activities of the Partnership.”
63. The LP Agreements also authorized the General Partner to “raise capital for the
Partnership by offering for sale and selling Units,” and to “do all things in that regard in the
name of and on behalf of the Partnership, including preparing and filing such offering or other
documents as the General Partner determines to be necessary or desirable, and all things done by
the General Partner are hereby ratified and confirmed.”
64. The LP Agreements for each offering, which were attached as exhibits to the
Offering Memoranda, stated that the General Partner has the authority to “represent and bind”
the Partnerships; to do “any and all things” regarding the partnerships; and to “make all decisions
regarding the Partnerships.  The parties to the LP Agreements were the investors, Fleet, and Xia,
who was designated as the “Original Partner.”
65. The Offering Memoranda for each offering further stated that the “General
Partner exercises ultimate authority for overall management of the Partnership and is responsible
for its day to day operations” and “may retain such other suitable parties to provide services to
the Partnership, including, without limitation, legal, consulting, marketing, administration, and
accounting services.”
III.      The      Defendants’      Scheme to Defraud
66. The Defendants engaged in a scheme to solicit funds from investors and to
misappropriate and misuse those funds, and they engaged in manipulative and deceptive acts in
furtherance of this scheme, including material misrepresentations and omissions.
67. The Defendants used the means or instrumentalities of interstate commerce or of
the mails in connection with the conduct described herein, including through communications
with investors and their agents in China, and with certain of the investors and their agents or

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representatives located across the United States.
68. Xia was actively involved in the solicitation of investors, and he travelled to
China to promote the offerings.
69. During a 2014 trip to China, Xia approved a script drafted by a colleague to be
used to promote the Eastern Emerald Project to potential investors.  In a July 25, 2014 email to
Xia, the colleague noted that the script was “modified slightly from the version you approved in
the spring (to reflect the brochure [Xia Entity Employee A] gave me and ou[r] discussion
yesterday).  Please let me know of any changes/corrections you wish to see. . . Here come the
remarks.”
70. The “remarks” read, in part (emphasis in original):
I am very pleased to be back in China with an attractive real estate development
opportunity to share with you.  On my first visit, great project Eastern Mirage/Westin
Hotel . . . track record 100% permanent residency approvals, but no confirmed next
project. Now, we have next project.

Boutique Regional Center that works exclusively and hand-in-glove with Fleet Financial
Group[.]

Because FNYMRC and Fleet Financial Group are team working solely on NYC real
estate developments together, we have deep experience in this field.  Based on this
experience, we believe that Eastern Emerald’s LaGuardia Convention is a rare and
special opportunity in New York.  It is:

600,000 sq. foot, mixed use development across the street from LAG that would
consist of a 300,000 square foot exhibition center, 200,000 square foot meeting
space, 800 hotel rooms – plus restaurants, retail space and a 500 spaces of
underground parking[.]

The project will benefit from the support of community leaders and NY State and
the U.S. government in the form of[] $45 million in tax credits[.]

As a potential EB-5 investor you would be an important part of this project, but only a
part.  The $75 million investment from 150 investors could comprise less than one-third
of the projected $228 million development budget.  (State, Federal govt, a bank and Fleet
Financial would all have large stakes, too).

19
Invest[m]ent mindset – this is a compelling investment opportunity in its own right

71. Xia replied to the email as follows: “everything is fine except the total eb-5 is
now $80 million and total construction cost $233 million.”
72. As shown in greater detail below, nearly all the representations in the script, as
well as many in the written materials provided to investors, were false.  Westin Hotel was not
involved; Fleet did not have “deep expertise;” the Eastern Emerald Project was not 600,000
square feet; and neither the federal nor state governments, nor any bank, nor even Fleet or FFG
had “large stakes.”  Moreover, the EB-5 investors were not “only a part” of the project’s funding,
they were providing substantially all of the funding.
73. Defendants violated the federal securities laws through multiple means.
Defendants made material misrepresentations and omissions to investors about the sources of
funding for the projects; the capabilities and experience of Xia and the development team; the
projects’ affiliation with the Westin Hotel chain; and the size of the Eastern Emerald Project.
Defendants also concealed the rental agreements between the developers and the owners of the
projects’ land, even though these agreements materially impacted the investors’ security and
ability to recover their investments.  Xia also controlled the flow of funds to benefit himself; and
concealed important information from investors.
A. Defendants’ Misappropriated and Misused Investor Funds
74. Under the Offering Memoranda, the investors’ $500,000 capital contributions
were to be used only for the particular phase of the project for which the funds were raised.
75. The Offering Memoranda stated that the “Partnership’s Loan will be used to
finance [the particular phase] of the project.”  Consistent with the Offering Memoranda, the Loan
Agreements, in a provision named “Mandatory Use of Proceeds,” stated that: “Borrower agrees

20
that the proceeds of the Loan shall only be used for the development, construction and operation
of the Project.”  The phrase “Project” is defined to mean the Eastern Mirage Center in the
EMMCO Loan Agreement; the North Queens Medical Center in the EMMCO NQMC Loan
Agreement; the Eastern Mirage Tower in the EMMCO TOWER Loan Agreement; and the
Eastern Emerald Project in the EEGH and EEGH II Loan Agreements.
76. This limitation was material because it assured investors that the funds for one
project would not be used for another project that the investor did not contribute to.
77. On multiple occasions, Defendants misappropriated or misused investor funds.
78. First, Xia’s company EEG acquired the Eastern Emerald land on Northern
Boulevard in December 2013 for approximately $17 million.  Xia, however, fraudulently used
funds from Eastern Mirage investors to purchase this land.  This misappropriation was
accomplished through two series of circuitous bank transfers in June and December 2013.  First,
in June 2013, $1.7 million was transferred from EMMCO NQMC bank accounts to a FFG
account, then to a Racanelli account, and then to an EEG bank account before being transferred
to the escrow agent for the seller of the Eastern Emerald land.  In December 2013, approximately
$15.3 million was transferred from EMMCO TOWER and EMMCO NQMC bank accounts to
FFG accounts, then to Racanelli accounts, and then to an EEG bank account, before being
transferred to the seller of the Eastern Emerald land.  Xia directed all these transfers, either
directly or by directing Yue to do so.  See Exhibit D (chart tracing Eastern Mirage funds cycling
through multiple accounts for Eastern Emerald land purchase).

79. Second, Xia used at least $11.8 million in Eastern Emerald investor funds for the
Eastern Mirage Project.  In early 2014, only approximately $4.25 million of the funds from the
Eastern Mirage offering remained.  The funds available for construction of the Eastern Mirage

21
Project were nearly depleted, in part as a result of the 2013 misappropriation of approximately
$17 million described in the previous paragraph.  To solve this problem, from 2014 to 2019, Xia
used at least $11.8 million of funds raised from Eastern Emerald investors to pay for costs
associated with the Eastern Mirage Project.
80. Third, Xia misappropriated investor funds for personal purposes.  In 2012, Xia
used approximately $819,809 in EMMCO funds to pay off a mortgage on a building located at
57-35 Lawrence Street, Queens, NY.  As with the other misappropriations, and apparently in an
effort to mask the purpose of the transfers, the funds were transferred from an EMMCO account
to and through FFG, Racanelli and JiQing Development accounts, before being used to satisfy
the mortgage.  The memo on the check states “Loan payoff #18 71-8 57-35 Lawrence.”  See
Exhibit E.
81. Fourth, in July 2015, in a similar pattern of transfers—the investor funds cycled
through EEGH, EEG, Racanelli and Amazon River accounts—Xia transferred approximately
$2.3 million to an escrow agent for a luxury apartment at One Madison Park in Manhattan.
Although the funds were returned to Amazon River in early 2016, Xia did not return the funds to
EEG, but allocated the returned funds to accounts of other entities he controlled.  Additionally,
the investor funds were not available for the Projects and were at risk during the period of time
they were misappropriated.  See Exhibit F.
82. Fifth, in January 2021, EEG received a check for $10,968,787.48 from the New
York State Comptroller Refund Account, which appeared to be a tax credit for the Eastern
Emerald Project.  These funds were deposited into CTBC Bank and used by Xia to purchase a
$10 million certificate of deposit in the name of EEG.  In an April 2021 loan agreement signed
by Xia, EEG borrowed $10 million from CTBC Bank and used the CD as collateral.  Between

22
April 30, 2021 and May 25, 2021, $5.6 million of the $10 million loan was transferred into
Yue’s personal account.  These funds should have been used for the Eastern Emerald Project.
The EEGH Offering Memorandum stated that $38 million in “Tax Credits” were a funding
source.  However, Xia misappropriated over $5 million of those monies for his personal benefit.
83. As these transactions show, Xia believed he was entitled to use investor money to
benefit himself and he treated EB-5 investor funds as his own money.  Xia stated as much in an
email dated June 2, 2020.  At the time, Xia wanted to obtain a residential mortgage from
Financial Firm A that offered residential mortgages only to clients.  Financial Firm A required a
prospective client to make a minimum deposit.  Xia proposed using an account holding “loan
proceeds from my EB-5 entity” to satisfy the minimum, but the firm responded that “if its [sic]
EB5 money unfortunately it doesn’t work.  It has to be yours personally/ your family’s money.”
Xia replied: “What is the definition of Eb-5 money? It is in the bank account of my entity and I
use my property as collateral for it.  If [the firm] lends me money and deposit into my bank
account with my hotel as collateral [w]ill it still be considered as [firm] money or []
investor/Deposit money?  I feel it is a loosely defined term to call it eb-5 money...”
84. Xia also authorized at least $1.6 million in transfers for purposes unrelated to
either project.  For example, there were over $840,000 in payments for apartments in Manhattan
rented by Yue; at least $76,000 in retail store purchases, including at Amazon, Apple, Best Buy,
Macy’s, Nordstrom, and Pioneer Home Electronics; approximately $49,760 for food shopping
and restaurants, including Whole Foods and Fresh Direct; and over $14,000 in hotel charges,
including luxury hotels in Hawaii.
85. Xia received over $700,000 in payments through a payroll firm from 2011
through 2020, as well as at least $125,000 in other transfers, traceable to investor funds.

23
B. Misrepresentations About The Sources of Funding For The Projects
86. The Offering Memoranda stated that the projects would be funded not just
through the EB-5 Program investors’ funds but through “a variety of sources.”  This disclosure
was material because having multiple funding sources made the investment appear safe and the
prospects of the projects’ completion more certain.
87. In the 2014 pitch script that Xia approved, Xia also emphasized as a key point that
investors would only pay “a part of” the project cost because of all the support from
governments, banks and others.
88. Defendants made material misrepresentations regarding non-investor sources of
funding, which they knew were false when made.  In fact, nearly all of the funding for both
projects came from the EB-5 investors.
89. The EMMCO, EMMCO Tower and EMMCO NQMC Offering Memoranda all
contain the following paragraph:
The Eastern Mirage Project is intended to be funded from a variety of sources including a
bank loan from [Bank A], N.A., a NYC Capital Resource Corp. (“NYCCRC”) triple tax-
exempt bond financing and EB-5 immigrant investment.  The Eastern Mirage Project is
financed by a $9,000,000 bank loan from [Bank A] at an interest rate equal to the sum of
(i) 3.25% plus (ii) the 30-day London Interbank Offered Rate (LIBOR).  The Eastern
Mirage Project is also being financed by a $17,000,000 triple tax-exempt bond financing
authorized under the American Recovery and reinvestment Act of 2009.  The program is
administered by the NYCCRC and the NYC Industrial Development Agency, both of
which are staffed by the New York City Economic Development Corporation.

90. The EMMCO Offering Memorandum - which estimated the “current budget for
hard construction costs for the Eastern Mirage Project” at $88 million - also stated:
The Eastern Mirage Project costs are expected to be financed as follows:
EB-5 Immigrant Investor Capital   (Up to) $57,500,000
NYCCRC Recovery Zone Facility Bonds    $17,000,000
[Bank            A]            Loan                                                                                    $                        9,000,000
Other            Investment            Sources                                                                        $14,000,000

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Total            Investment            in            Project                                                                        $97,500,000

91. The EMMCO NQMC and EMMCO TOWER Offering Memoranda repeated the
same Eastern Mirage Project funds sources as in paragraph 89, with two changes.  First, the
$9,000,000 loan was to be from Bank B - not Bank A.  Second, the Offering Memoranda
included the statement that in addition to the $17,000,000 in NYCCRC Bonds, “[u]p to an
additional $12,000,000 in NYCCRC Recovery Zone Facility bond financing is available if
needed.”
92. As Defendants knew, the representations in the three EMMCO Offering
Memoranda about non-EB-5 financing were false or misleading.
93. Defendants knew that the representations about receiving the NYCCRC bonds
were false.  An allocation of NYCCRC bonds for the Eastern Mirage Project was approved in
2009, but Xia turned down the allocation.  A letter to the NYCCRC from Xia’s counsel dated
December 6, 2010 stated that Xia “shall not be seeking to use the allocation of $17,000,000 of
Recovery Zone Facility Revenue Bonds that has been made available to it.”
94. As a result, on December 7, 2010, Xia received a letter from NYCCRC
terminating Eastern Mirage’s Recovery Zone Facility bond allocation which also stated that the
bond program would expire on December 31, 2010.  Despite knowing that the NYRCCRC bonds
would not be issued, the Defendants’ marketing materials and Offering Memoranda, including
the EMMCO NQMC and EMMCO Tower Offering Memoranda which were dated January 31,
2011, continued to tout the government bonds as a funding source to Eastern Mirage investors.
A reasonable investor would find the representation that the project was backed by government
bonds to be material.
95. In addition, there was no loan from Bank A when the Defendants stated in the

25
Offering Memoranda that: “The Eastern Mirage Project is financed by a $9,000,000 bank loan
from Bank A at an interest rate equal to the sum of (i) 3.25% plus (ii) the 30-day London
Interbank Offered Rate (LIBOR).”  In fact, neither Bank A nor Bank B provided a loan to the
Eastern Mirage Project.
96. The EEGH Offering Memorandum estimated the total projected costs of the
Eastern Emerald Project to be $190 million, and represented the following:
The Eastern Emerald Project costs are expected to be financed as follows:

Loan Proceeds from EB-5 Funds     $80,000,000
Tax            Credits                                                                        $38,000,000
Loan from [Broker Dealer A]    $72,000,000
Total            Investment            in            Project                                                $190,000,000

97. The EEGH Supplemental Offering Memorandum contained the following
disclosure:
The total project costs for the Eastern Emerald Project of One Hundred and
Ninety Million Dollars ($190,000,000) shall be financed as follows:

Loan from New Commercial Enterprise, EEGH, L.P.: $110,000,000
Brownfield            Tax            Credit:                                                            $21,200,000
New            Market            Tax            Credit                                                            $18,000,000
Equity            from            Developer:                                                            $40,800,000
                        TOTAL            PROJECT            COSTS:                                    $190,000,000

98. The EEGH II Offering Memorandum set the budget for the expanded “Eastern
Emerald Project II” at $181,413,011, and further stated:
The Eastern Emerald Project II costs are expected to be financed as follows:
Loan Proceeds from EB-5 Funds    $80,000,000
NYS            Tax            Credits                                                                        $17,000,000
Capital Contribution from Developer    $44,413,011
Loan            from            [Broker            Dealer            A]                                                            $40,000,000
Total            Investment            in            Project                                                            $181,413,011

99. None of these sources contributed funds to the Eastern Emerald Project (with the
possible exception of the Brownfield Tax Credit), which Defendants knew or should have known

26
at the time the Offering Memoranda was provided to investors.
100. The EEGH Supplemental Offering Memorandum stated definitively that the New
Market Tax Credit “shall” fund $18 million for the Eastern Emerald Project.  Xia, however, not
only never received the New Market Tax Credit, he never even seriously pursued it.  Xia merely
had his lawyer respond to an inquiry about project funding from USCIS by providing a “letter of
interest” dated November 14, 2013 from an employee of Financial Firm B.   Xia had Yue call
Financial Firm B and ask for the letter of interest regarding the New Market Tax Credit.  Xia
never actually pursued the New Market Tax Credit after obtaining the letter of interest.
101. The EEGH Offering Memorandum also represented that Broker Dealer A was
“expected” to provide a $72 million loan, and the EEGH II Offering Memorandum represented
that Broker Dealer A was expected to make a $40 million loan.  However, there was never any
loan from Broker Dealer A.
102. In a September 17, 2017 “Request for Evidence,” USCIS wrote to Xia’s EB-5
counsel that “[t]he Business Plan does not present evidence that the $40 million loan from
[Broker Dealer A]  . . . has been secured or is readily available. . . . The credibility of the
project’s future would be enhanced with evidence on non-EB-5 funding sources.  Therefore,
please submit then following: Projected non-EB-5 funds and their source if applicable (e.g.,
developers, municipal bonds, loans, etc.); Secure commitment from non-EB-5 investors if
applicable (contracts, bonds, loans, letter of confirmation from the lender, other sources, etc.).”
103. The response from Xia’s lawyer said nothing about a $40 million loan from
Broker Dealer A.  Instead, the lawyer reported that “LaGuardia Performance Center, LLC has
already obtained a construction loan commitment letter dated August 18, 2017 issued by [Broker
Dealer B].”  The loan commitment purportedly from Broker Dealer B was $85 million, and the

27
letter pointed out that if the loan is granted then the project “will be well covered.”
104. Xia’s attorney attached the $85 million loan commitment letter from Broker
Dealer B to her letter.  The letter was from Registered Representative A, an employee of Broker
Dealer B, who was identified in the letter as Head of Public Finance, to Xia.  The letter from
Registered Representative A was not authentic.  Although Registered Representative A worked
at Broker Dealer B in August 2017, his title was not “Head of Public Finance.”  In addition, the
letterhead used for the purported Broker Dealer B’s letter is not authentic.  Moreover, Broker
Dealer B was a small, family-owned broker-dealer that was not in the business of making
construction loans and it never considered making any loan to Xia or his company.
105. The representations in the EEGH Supplemental Offering Memorandum and in the
EEGH II Offering Memorandum that the “[d]eveloper” - meaning entities controlled by Xia -
was expected to contribute a “capital contribution” or “equity” of $40.8 million and $44.4
million, respectively, were also false.  Neither Xia nor his entities ever contributed such funds to
the projects, and Defendants knew or were reckless in not knowing, at the time these
representations were made, that Xia did not have and could not reasonably expect to have the
financial ability to make anything more than a nominal contribution of his own funds.
According to bank records, the only non-investor funds that Xia and his entities contributed to
the projects totaled approximately $3.5 million.
C. Misrepresentations Regarding Xia and the Development Team
106. For an investor in a real estate project, the experience and track record of the
developer is material.
107. The Offering Memoranda for the five offerings contain detailed descriptions of
“[t]he Project management and development team.”  Xia was described as being “active for ten

28
years in land acquisition, commercial and residential development, marketing research, value-
added strategies, financing, property management and leasing, and other related activities.”
108. The Offering Memoranda for each of the five offerings stated that Racanelli has
been “recognized as one of the region’s leading providers of preconstruction planning, project
management, design/build, and general contracting services.”
109. The Offering Memoranda further stated that “[s]ince its founding, Racanelli has
been responsible for building and renovation across a broad range and variety of market
segments, completing projects that include corporate headquarters, industrial complexes,
hospitals, assisted living facilities, university and college facilities, retail stores, hotels,
restaurants, houses of worship, self-storage complexes, condominiums and townhouses.”
110. An Eastern Mirage marketing brochure given to investors stated that the (Xia-
owned) development team has “decades of experience from over one hundred successful major
projects.”  An Eastern Emerald brochure also stated that FFG, the developer of the Eastern
Mirage project, has “nearly 20 years of experience in real estate development in the eastern
United States” and that it was the winner of several New York real estate awards for green and
intelligent building development practices.
111. Racanelli was also touted in an Eastern Mirage marketing brochure as having
been founded “60 years” ago.  Likewise, the Offering Memorandum for the EMMCO TOWER
offering and the EMMCO Business Plan provided to investors to submit to USCIS stated that
Racanelli was founded “over six decades ago.”
112. The Business Plans for EMMCO NQMC, EMMCO TOWER, EEGH, and EEGH
II described Racanelli as having been founded “decades ago.”
113. These representations were false.  In fact, Racanelli was incorporated in 2011, and

29
it appears that Xia took the Racanelli name from a well-known construction firm and copied -
almost word for word - the description in the Offering Memoranda directly from the website of
an established company, the Original Racanelli.
114. In April 2015, the Original Racanelli—which unlike Xia’s Racanelli did have six
decades of construction experience—sued Xia and Racanelli, alleging that Xia “improperly
assumed, utilized, displayed, and disseminated” the Original Racanelli’s protected trade name.
In December 2015, the parties settled the trademark litigation and Xia agreed to “fully and
completely refrain from any and all use of the name Racanelli in any capacity whatsoever,”
although through a carve-out Xia was permitted to use the name in connection with the Projects.
115. In December 2015, Perini was incorporated to replace Racanelli as the general
contractor.  (The name bears a similarity to Tutor Perini Corp. – another well-known
construction company unaffiliated with Xia).  However, Perini consisted of the same individuals
who worked under the Racanelli name, and investors were never told that the general contractor
had changed.  From January 2016 through October 2017, the Defendants continued to provide
EEGH II investors with Offering Memoranda that cited Racanelli.
116. The Defendants also failed to disclose to investors that he controlled Racanelli
and Perini, the purported general contractors for the projects.  The Offering Memoranda did not
disclose an affiliation between Racanelli and Xia.  On the contrary, Racanelli is falsely described
as an independent company.
117. Although Racanelli and Perini had Xia Entity Employee A as a nominal person in
charge, this person received only about $87,000 through Racanelli and $186,000 through FFG’s
payroll firm in compensation for over ten years of work.  In fact, Xia controlled both Racanelli
and Perini and was himself the de facto general contractor.  Indeed, in a February 18, 2014 email

30
regarding a construction contract between a third party and Racanelli, Xia Entity Employee A
asked Xia if she should “ask Julia to sign for [Xia].”
118. Although Defendants concealed Xia’s control of Racanelli and Perini from
investors, in numerous court filings as well as a bank signature card, Xia represented himself as
the President of Racanelli and the Manager of Perini.  See Exhibit G (excerpts from court filings
and bank signature cards).
119. The Offering Memoranda also contained material misrepresentations and
omissions of material fact regarding Xia’s construction experience and expertise.  Each Offering
Memorandum for both projects stated that “Mr. Xia is a New York City real estate developer and
President of the General Partner.  Mr. Xia has been active for ten years in land acquisition,
commercial and residential development, marketing research, value-added strategies, financing,
property management and leasing, and other related activities.  His company, Fleet Financial
Group, Inc. specializes in ‘green’ projects[.]”
120. The only specific project of Xia’s that is mentioned in the Offering Memoranda,
however, was “Shangri-La Towers,” described as a “mixed-use condominium” development.
The Shangri-La building was actually Xia’s first construction project.  With only this limited
background in construction prior to embarking on the Eastern Mirage Project, Xia was ill-
equipped to handle two projects of the scope and magnitude of the Eastern Mirage and Eastern
Emerald Projects, as he well knew.
121. The insufficient capacity of Xia and his team to complete the large-scale
construction projects is apparent from payroll records.  Although Xia created nearly a dozen
entities (see supra paragraphs 31-48) that received investor funds, all of his companies shared
the same personnel and were all paid through the same payroll firm.  Notably, before 2017, only

31
five people, including Xia and Yue, received payments through the payroll firm.
122. Current photographs of the Eastern Mirage Project show the building to be empty
and still under construction.  And although a Brownfield remediation (addressing contamination
from the former occupant of the land) was completed in 2015 at the Eastern Emerald Project site,
it is currently still only a largely vacant dirt hole surrounded by a concrete wall.
123. The Eastern Emerald Project was issued at least 41 violations by the New York
City Department of Buildings (“NYCDOB”), 31 of which were for hazardous conditions.
Numerous stop-work orders have been issued by the NYCDOB, and there is currently a stop-
work order in place.
124. On January 4, 2019, workers at the Eastern Emerald site—in violation of a stop-
work order—were engaged in excavation and caused a support wall along Northern Boulevard to
collapse.  According to a NYCDOB report, the activity constituted “illegal work” and “led to the
collapse of the sidewalk, half the width of Northern Boulevard, and the loss of gas, water,
electrical, and telecommunication services.”  The Report stated that Xia was interviewed and
“was evasive and unclear as to who was supervising and directing field operations prior to the
collapse,” and that Xia, among others, “failed to act in a reasonable and responsible manner.”
125. Xia and his entities face significant financial exposure from pending litigation
involving ConEdison, which filed a damages lawsuit against EEG, FFG, Perini, Racanelli and
the City of New York.  The City of New York subsequently filed a Cross-Claim against EEG,
FFG, Perini, Racanelli and Shangri-La Green.
D. Defendants Misrepresented the Affiliation With Westin
126. The Eastern Mirage marketing materials represented that the hotel portion of the
project would be a Westin-branded hotel.  Specifically, the marketing materials were

32
prominently titled: “FNYMRC The New York Westin Project” and claimed that the hotel would
be a Westin Element hotel.
127. The marketing script approved by Xia in 2014 described the Eastern Mirage
Project as the “Eastern Mirage/Westin Hotel.”
128. The EMMCO Tower Offering Memorandum also stated that the Eastern Mirage
Tower “will encompass the development of the Westin Element Hotel & Condo Apartment
building.”
129. Similarly, the marketing materials for the Eastern Emerald Project claimed that
Eastern Emerald would contain a Westin Hotel.
130. These representations about sponsorship or affiliation with Westin were false.
Although Xia received a noncommittal “letter of interest” in 2014, no deal with Westin was ever
reached and the letter provided no basis for the Defendants to claim that they had a deal.
Defendants knew, or were reckless in not knowing, at the time they chose to prominently brand
their projects as Westin hotel projects, that they had no reasonable basis to make such
representations.
131. A reasonable investor would regard the affiliation with a major hotel chain as
material.  Indeed, Xia received WeChat messages from investors and their agents in 2018 in
which they referred to the Eastern Mirage Project as the “Westin project,” yet Defendants never
disclosed that there was no Westin deal.
E. Defendants Misrepresented the Size of the Eastern Emerald Project
132. The EEGH II Offering Memorandum stated that the “original building” described
in the EEGH Offering Memorandum was 643,180 square feet, and, as a result of the “expansion”
described in the EEGH II Offering Memorandum, the square footage would increase to

33
1,199,578 square feet.  Both representations were false when made, as Defendants well knew.
The size of the square footage and the expansion of the original project gave the impression that
the project was on track to being successful.  A reasonable investor would find this material.
133. The Defendants knew that both square footage numbers were false.  The 2014
“Plan/Work Application” that Xia signed and which was filed with the New York City
Department of Buildings only sought permission for a structure of 350,186 feet.  The
Defendants’ square footage estimate in the EEGH II Offering Memorandum was three times
what they had been authorized to build.  Xia never sought or received permission to build
structures anywhere near the size of the buildings described in the Offering Memorandum.
F. Defendants Failed to Disclose the Highly Material Rental Agreements
134. The Offering Memoranda stated that there were “no material conflicts of interest
between the General Partner and its affiliates on the one hand and the Partnership on the other
hand.”  The Offering Memoranda further stated that the “General Partner is accountable to the
Partnership as a fiduciary and consequently must exercise good faith and integrity in handling
the Partnership’s affairs.”  As the President, CEO, and Managing Member of the General
Partner, Xia had an obligation to exercise good faith and integrity in handling the Partnership’s
affairs.
135. The Loan Agreements entered into by each of the limited partnerships required
the borrowers—FFG, EEG and LaGuardia—to repay the investor funded loans.  But, the ability
of FFG and LaGuardia to repay the loans was seriously impaired by undisclosed side agreements
created by Xia.  These side agreements, which are material omissions, are another example of the
self-dealing that is a hallmark of Xia’s financial arrangements.
136. On January 1, 2008 (two years before the Eastern Mirage Project’s EMMCO

34
offering), X&Y leased the Union Street property to FFG, Eastern Mirage’s developer, under a
99-year land lease requiring annual rent in the amount of $2.5 million for the first three years,
and $3.5 million for the next three years, with subsequent increases.  FFG, which has never made
a payment and has been in default, currently owes unpaid rent to X&Y of at least $42.2 million
under the terms of this lease agreement.  Yue signed the lease agreement on behalf of X&Y and
Xia signed on behalf of FFG.
137. On September 28, 2015, LaGuardia entered into a lease agreement with EEG that
requires LaGuardia to pay EEG an annual rent of $3.5 million, which increased to $4.5 million.
LaGuardia, which has never made a payment, currently owes unpaid rent of at least $16.5
million to EEG under the terms of this lease agreement.  Xia signed the lease agreement on
behalf of both EEG and LaGuardia.
138. These agreements, which were never disclosed to investors, are highly material.
In the event the Eastern Mirage and Eastern Emerald properties are sold, X&Y and EEG would
have the right to enforce FFG’s and LaGuardia’s payment obligations, which significantly
diminishes the amount they will have available to repay the investors.  In addition, given that
both FFG and LaGuardia have been in default, X&Y and EEG have the right under their loan
agreements at any time to foreclose and essentially bankrupt FFG and LaGuardia.  This is a
significant risk to investors, who have no recourse against X&Y and EEG under the loan
agreements.  Furthermore, these enormous, accrued debts will seriously impair FFG’s and
LaGuardia’s ability to obtain the type of long–term financing that they represented would be
obtained to repay the investors their capital contributions.
139. Xia was on all sides of these secret agreements, which protected his interests to
the detriment of the investors.

35
G. Xia Directed Funds Through Over 150 Accounts to Conceal his Fraud and to
Benefit Himself
140. Contrary to the Defendants’ duty to act “as a fiduciary,” Xia managed the $229
million that flowed into bank accounts he controlled in a way to protect and benefit himself at
the expense of the investors.  Xia created over 150 accounts in the names of various entities he
owned or controlled (see supra paragraphs 31-48) and used these bank accounts to engage in
numerous, multi-step transactions to commingle investor funds and to hide the actual source of
payments.  Through hundreds of transactions that appear to have little or no legitimate business
purpose, the investor funds were transferred into and out of over 150 accounts in what amounted
to a shell game.
141. There were continuous and significant fund transfers of investor funds in every
conceivable direction for more than seven years, not only from the developer to the purported
general contractors (Racanelli and Perini) and then to other entities owned and controlled by Xia,
but also between and among the other entities owned and controlled by Xia, and then cycled
back to the developers and Racanelli and Perini.  To summarize, from 2012 through January
2019, over $127 million in investors’ funds was transferred from the developers to the purported
general contractors, and at least $85.9 million was then transferred to other entities that Xia
owned and controlled.   Of the $85.9 million, approximately $32.7 million was cycled back
upstream to bank accounts of the developers and approximately $1.14 million was then cycled
back to bank accounts of the general contractor.
142. In addition, of the $85.9 million transferred to Xia Entities, approximately $43.6
million were not supported by any invoices.  An invoice from a Xia entity to the payors
(Racanelli/Perini) would be expected to show what services were provided, the persons

36
providing such services, and the payment for each service.  The absence of any invoices for
$43.6 million in transfers suggests the transfers were unfounded or had no legitimate business
purpose.  Moreover, the invoices that Xia provided for Amazon River, FFG, JiQing
Development, Manekineko Group, Samuel Development, Shangri-La Green, Shangri-La 9F, and
X&Y to ostensibly support approximately $32.2 million in payments of investor funds to those
entities do not appear legitimate.  Notably, these Xia invoices contained lengthy lists of tasks
performed and a single amount at the bottom, with no breakdown of how much was billed for
each task and who performed these tasks.  The Xia invoices were ostensibly submitted by seven
of his entities and were in large round-dollar amounts that did not vary from month to month.
These Xia invoices also were strikingly different in form and substance from the many legitimate
third-party invoices submitted by outside vendors to Racanelli/Perini.
143. The multiple transfers between and among the accounts do not appear to have had
legitimate business purposes.
H. Defendants Concealed Material Information From the Limited Partners

144. To hide their scheme from the investors, Defendants failed to disclose to them
critical information that might have revealed Defendants’ illegal conduct, even though
Defendants had an affirmative obligation as fiduciaries to do so.
145. Defendants failed to disclose to investors in the later Eastern Emerald offerings
that they had made numerous misrepresentations and omissions to investors in earlier Eastern
Mirage offerings.  During 2015, 2016 and 2017, the EEGH and EEGH II offerings raised $148
million from investors—nearly three times the amount raised in the earlier Eastern Mirage
offerings.  Defendants did not disclose to these later investors that Xia had misappropriated
Eastern Mirage investor funds and that the Defendants had also made other false and misleading
statements.  Given that the Defendants touted the supposed success of the Eastern Mirage

37
offerings to promote the Eastern Emerald offerings, the fact that the earlier offerings were
marred by their numerous false and misleading statements and misappropriations would have
been highly material to investors in 2015, 2016 and 2017.  The Defendants nevertheless
concealed this material information from the Eastern Emerald investors.
146. In addition, the Offering Memoranda stated that “the Partnership will send to each
Limited Partner, generally within 90 days after the end of each fiscal year of the Partnership, an
accounting report including a balance sheet and statements of income, changes in Partner’s
equity and cash flows, prepared in accordance with Generally Accepted Accounting Principles,
plus a schedule and summary description of the investments owned by the Partnership at year-
end and a statement for each LP of its capital account.”  Defendants did not provide investors
with the reports required by the Offering Memoranda as described above.
I. Yue Received At Least $9.7 Million in Ill-Gotten Gains
147. Yue received a total of more than $9.7 million in ill-gotten gains for which she
has no legitimate claim.  From 2012 through January 2019, Yue received a total of $4.1 million
from Xia Entities, including Racanelli, sourced by investor funds, and she also received $5.6
million between April and May 2021 from a line of credit that was collateralized with investor
funds (see supra paragraph 81).
148. Although Yue was an authorized signatory on many bank accounts of the Xia
Entities, she acted primarily at Xia’s direction.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(Both Defendants)

149. The SEC re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 148.

38
150. Defendants, directly or indirectly, singly or in concert, in the offer or sale of
securities and by the use of the means or instruments of transportation or communication in
interstate commerce or the mails, (1) knowingly or recklessly have employed one or more
devices, schemes or artifices to defraud, (2) knowingly, recklessly, or negligently have obtained
money or property by means of one or more untrue statements of a material fact or omissions of
a material fact necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading, and/or (3) knowingly, recklessly, or negligently
have engaged in one or more transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon the purchaser.
151. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C.
§ 77q(a)].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
(Both Defendants)

152. The SEC re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 148.
153. Defendants, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly have (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one
or more untrue statements of a material fact or omitted to state one or more material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of

39
business which operated or would operate as a fraud or deceit upon other persons.
154. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C.
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
THIRD CLAIM FOR RELIEF
Unjust Enrichment
(Relief Defendant)

155. The SEC re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 148.
156. Yue received a total of at least $9.7 million in ill-gotten gains derived from the
Defendants’ above-referenced violations of the securities laws.
157. Yue has no legitimate claim to these ill-gotten gains.
158. Yue obtained the funds under circumstances in which it is not just, equitable, or
conscionable for her to retain the funds.
159. Yue has therefore been unjustly enriched.
PRAYER FOR RELIEF
 WHEREFORE, the SEC respectfully requests that the Court enter:
I.
A Final Judgment permanently restraining and enjoining Defendants and each of their
respective agents, servants, employees, attorneys and other persons in active concert or
participation with each of them who receive actual notice of the injunction by personal service or
otherwise, from any ongoing and future violations of Securities Act Section 17(a) [15 U.S.C. §
77q(a)],  and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5];

40
II.
An Order directing the Defendants and Relief Defendant, and each of their financial and
brokerage institutions, agents, servants, employees attorneys-in-fact, and those persons in active
concert or participation with them, including the Xia Entities, who receive actual notice of such
Order by personal service, facsimile service, or otherwise, to hold and retain within their control,
and otherwise prevent, any withdrawal, transfer, pledge, encumbrance, assignment, dissipation,
concealment or other disposal of any assets, funds, or other property (including money, real or
personal property, securities, commodities, choses in action or other property of any kind
whatsoever) of, held by, or under the control of the Defendants and Relief Defendant, whether
held in their names or for their direct or indirect beneficial interest wherever situated;
III.
 An Order directing the Defendants and Relief Defendant to file with this Court and serve
upon the Commission, within three (3) business days, or within such extension of time as the
Commission staff agrees to, sworn accountings, signed by Xia as to the Defendants and signed
by Yue in her capacity of Relief Defendant, under penalty of perjury, setting forth:
 (1) All assets, liabilities and property currently held, directly or indirectly, by
or for the benefit of each such Defendant and Relief Defendant, including, without
limitation, bank accounts, brokerage accounts, investments, business interests, loans,
lines of credit, and real and personal property wherever situated, describing each asset
and liability, its current location and amount;
 (2) All money, property, assets and income received by Defendants or Relief
Defendant for their direct or indirect benefit, at any time from January 1, 2010, through

41
the date of such accounting, describing the source, amount, disposition and current
location of each of the items listed;
 (3) The names and last known addresses of all bailees, debtors, and other
persons and entities that currently are holding the assets, funds or property of such
Defendants and Relief Defendant; and
 (4) All assets, funds, securities, and real or personal property received by such
Defendants and Relief Defendant, or any other person controlled by them, from persons
who provided money to such Defendants and Relief Defendant in connection with the
offer, purchase or sale of securities, from January 1, 2010 through the date of such
accounting, and the disposition of such assets, funds, securities, real or personal property;
IV.
An Order providing that the Commission may take expedited discovery;
V.
 An Order appointing a Monitor;
VI.
A Final Judgment ordering Defendants and Relief Defendant to disgorge all ill-gotten
gains and/or unjust enrichment received directly or indirectly, with pre-judgment interest
thereon, as a result of the alleged violations, pursuant to Exchange Act Sections 21(d)(5) and
21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)];
VII.
A Final Judgment ordering Defendants to pay civil money penalties under Securities Act
Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];
and

42
VIII.
Granting any other and further relief this Court may deem just and proper.

JURY DEMAND

            Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands trial by
jury in this action of all issues so triable.

Dated:  New York, New York
September 27, 2021

____________________________________
RICHARD R. BEST
REGIONAL DIRECTOR
Lara M. Mehraban
Judith Weinstock
Kevin P. McGrath
David Stoelting
Brenda Chang
Kim Han
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0174 (Stoelting)
[email protected]

RICHARD BEST
Digitally signed by RICHARD BEST
Date: 2021.09.27 07:21:44 -04'00'

Exhibits to Complaint
SEC v. Richard Xia and Fleet New York Metropolitan Regional Center LLC (E.D.N.Y.)

Exhibit           A:           Easter           Mirage           project           photos           .           .           .           .           .           .           1
Exhibit B: Easter Emerald Project photos  . . . . . 2
Exhibit C: Bank Accounts and Authorized Signatories . . . . 3
Exhibit D: Eastern Mirage Funds Used to Purchase Eastern Emerald Land  . . 7
Exhibit E: Eastern Mirage Funds Used to Pay Off Lawrence Street Mortgage . 9
Exhibit F: Eastern Emerald Project Funds Used for One Madison Park  . . 10
Exhibit G: Attestations by Xia of Affiliations with Racanelli and Perini . . 11

COMPLAINT EXHIBIT A
Eastern Mirage Project
42-31 Union St., Queens, NY, Sept. 14, 2021
1

COMPLAINT EXHIBIT B
Eastern Emerald Project
112-21 Northern Blvd., Queens, NY, Sept. 14, 2021
2

3

4

5

6

FUNDS FROM INVESTORS
EMMCO NQMC LP 1282
Bal. June 19, 2013:$14,783,646
EMMCO NQMC LP 0896
Bal. June 19, 2013:$19,018
Fleet Financial 1183
Bal. June 25, 2013:$99,915
Racanelli 1555
Bal. June 25, 2013:$63,293
Eastern Emerald Group 3379
Acct. Opened June 26, 2013: $0
6/27/2013$1,700,000 Transfer:
Rothkrug, Rothkrug & Spector, LLP
as Escrow Agent
attorney for seller of Eastern Emerald property
Total:  $2,000,000
6/27  $2,000,000
Total:  $2,000,000
6/27  $2,000,000
Total:  $1,700,000
6/27$490,000
6/27$420,000
6/27$490,000
6/27$300,000
Total:  $1,700,000
6/27  $1,700,000
COMPLAINT EXHIBIT D
Eastern Mirage Project Funds Used to Purchase
Eastern Emerald Project Land
JUNE 2013 TRANSFERS
7

COMPLAINT EXHIBIT D
Eastern Mirage Project Funds Used to Purchase
Eastern Emerald Project Land
DECEMBER 2013 TRANSFERS
8

FUNDS FROM INVESTORS
EMMCO LP 3048
Beg. Bal. March 2012: $1,200,752
Fleet Financial 0375
Bal. March 29, 2012:   $11,130
Racanelli 1555
Beg. Bal. April 1, 2012:$47,559
JiQingDevelopment 0300
Beg. Bal. April 1, 2012:$1,042
4/9/2012$819,810 Transfer:
Chinatown Federal Savings Bank
memo:
“Loan payoff #18 71-8 57-35 Lawrence”
Total:  $1,160,000
3/30$330,000
4/4$330,000
4/6$500,000
Total:$983,000
4/2$280,000
4/4$323,000
4/6$380,000
Total:$819,810
4/6$819,810
COMPLAINT EXHIBIT E
Eastern Mirage Project Funds Used to Pay Off
57-35 Lawrence Street Mortgage
MARCH/APRIL 2012 TRANSFERS
9

COMPLAINT EXHIBIT F
Eastern Emerald Project Funds
Used for One Madison Park
JULY 2015 TRANSFERS
FUNDS FROM INVESTORS
EEGH LP 5168
Beg. Bal. July 1, 2015: $18,365,308
EEGH LP 6166
Beg. Bal. July 1, 2015: $0
Total:  $3,000,000
7/1$3,000,000
Total:  $3,000,000
7/1$3,000,000
Eastern Emerald Group 3379
Beg. Bal. July 1, 2015: $263,599
Racanelli 5283
Beg. Bal. July 1, 2015: $9,800
Amazon River LLC 6158
Acct. Opened July 2, 2015:$0
7/7/2015$2,325,000 Transfer:
Michael, Levitt & Rubenstein LLC
as Escrow Agent
(for “One Madison Park 43A”)
Total:  $2,330,000
7/6$2,330,000
Total:  $2,328,000
7/7$2,328,000
10

11
COMPLAINT EXHIBIT G

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
-------------------------------------------------------------------------
RACANELLI CONSTRUCTION GROUP, INC.,
-against-
EASLE SERVICE CORP. and SCOTT EHRLER
VERIFIED COMPLAINT
RICHARD XIA, being duly sworn, deposes and states:
1.I am the President of Racanelli Construction
Group, Inc.
(01-10-2013)
REPLY TO COUNTERCLAIMS
RICHARD XIA, being duly sworn, deposes and states:
1.I am the President of Racanelli Construction
Group, Inc.
AFFIDAVIT OF RICHARD XIA IN SUPPORT OF
PLAINTIFF’S ORDER TO SHOW CAUSE
RICHARD XIA, being duly sworn, deposes and says:
1.I am the president of the plaintiff, Racanelli
Construction Group Inc.
AFFIDAVIT OF RICHARD XIA
RICHARD XIA, being duly sworn, deposes and says:
1.I am the president of the plaintiff, Racanelli
Construction Group Inc.
AFFIDAVIT IN SUPPORT
RICHARD XIA, being duly sworn, deposes and states
under the penalties of perjury, as follows:
1.I am the President of Plaintiff Racanelli
Construction Group, Inc.
12
COMPLAINT EXHIBIT G

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------------
RACANELLI CONSTRUCTION CO., INC.,
- against -
RACANELLI CONSTRUCTION GROUP INC., and RICHARD XIA
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
----------------------------------------------------------------
VLADIMIR DEVDARIANI
- against -
X & Y DEVELOPMENT GROUP, LLC and PERINI GROUP, INC.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
----------------------------------------------------------------
X-TREME CONCRETE INC.,
-against –
RACANELLI CONSTRUCTION GROUP, INC., X&Y DEVELOPMENT GROUP, LLC
and “JOHN DOE NO. 1” through “JOHN DOE NO. 5”
VERIFIED ANSWER
RICHARD Y. XIA, duly sworn, deposes and says to be
true and correct, under the penalties of perjury, under the
laws of the United States of America, the following:
I am an individual Defendant and the President
of Defendant Racanelli Construction Group, Inc.
AFFIDAVIT OF SEARCH CONDUCTED
RICHARD XIA, being duly sworn, deposes and says:
1.I am the manager of Defendant PERINI GROUP, INC.
AFFIDAVIT OF RICHARD XIA IN OPPOSITION TO
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
RICHARD XIA, being duly sworn, deposes and says:
2.In addition, I am also a former member
of Racanelli Construction Group, Inc.
13
COMPLAINT EXHIBIT G

RICHARD R. BEST  
REGIONAL DIRECTOR 
Lara S. Mehraban 
Judith Weinstock 
Kevin P. McGrath 
David Stoelting 
Brenda Chang 
Kim Han 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place  
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0174 (Stoelting) 
[email protected] 
 
 
UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 

 

 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
RICHARD XIA, a/k/a YI XIA, and 
FLEET NEW YORK METROPOLITAN 
REGIONAL CENTER, LLC, f/k/a FEDERAL 
NEW YORK METROPOLITAN REGIONAL 
CENTER, LLC,  
 
                                             Defendants,  
 
                         -and- 
 
JULIA YUE, a/k/a JIQING YUE,  
 
                                             Relief Defendant. 
 
 

 
 
COMPLAINT 

   
21 Civ. _____ (       ) 

 
   

JURY TRIAL DEMANDED 
  

           
          

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Plaintiff Securities and Exchange Commission (“SEC”), for its Complaint against 

Defendants Richard Xia, a/k/a Yi Xia (“Xia”), and 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”), alleges as follows: 

SUMMARY 

1. 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. 

2. The Defendants enticed predominantly Chinese foreign nationals to make 

investments of $500,000 each to fund two large, mixed-use real estate projects that were to be 

built in Queens, NY.  Xia named them the “Eastern Mirage Project,” located at 42-31 Union 

Street, and the “Eastern Emerald Project,” located at 112-51 Northern Boulevard.  In their 

offering materials, the Defendants represented that the investor funds would be used to build two 

five-star hotels, a modern conference center, luxury residences, retail stores, a top-shelf 

restaurant, vast underground parking garages, and a medical center.   

3. 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.  See Exhibits A and B hereto (photographs of the 

Eastern Mirage and Eastern Emerald sites taken on September 14, 2021).  The funds for the 

Eastern Mirage Project have been exhausted far short of completion of the project.  And only 

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approximately $77 million is left for construction of the Eastern Emerald Project, far short of the 

amount the Defendants had estimated would be needed to complete the construction of the 

project.    

4. The Defendants pitched the investments in the projects as a way for investors to 

participate in the EB-5 Program administered by the United States Citizenship and Immigration 

Services (“USCIS”), which allows foreign nationals to qualify for permanent residency if they 

make a qualified investment of $500,000 or more in a specified project that is determined to 

create or preserve a certain number of jobs for United States workers.  

5. The terms of the Eastern Mirage and Eastern Emerald offerings were generally 

the same.  Each investor made a $500,000 capital contribution to a limited partnership; a 

processing fee of $50,000 was also required.  The investors’ funds were required to be loaned to 

the projects’ developers, who were affiliates of Fleet, and used only for project-specific 

purposes.  Each investor became a limited partner, and the General Partner (Fleet) had complete 

control over the offerings.  The investors were told that their $500,000 capital contributions 

would be returned to them when the loan matured. 

6. The primary offering documents were the Private Offering Memoranda 

(“Offering Memoranda”), which included Limited Partnership Agreements (“LP Agreements”), 

and Business Plans, which Xia reviewed and approved, and various marketing materials.  These 

documents contained numerous material misrepresentations and omissions.  First, Defendants 

represented to investors that their $500,000 capital contributions would be used only for the 

construction and operation of that specific project.  Instead, Defendants repeatedly 

misappropriated money from one project and used it for another.  For example, Defendants used 

approximately $17 million in Eastern Mirage investor funds to purchase the Eastern Emerald 

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land; and used at least $11.8 million in Eastern Emerald investor funds for Eastern Mirage 

project construction.  Xia also misappropriated investor funds for personal and other improper 

expenses.   

7. Second, the Defendants represented to investors that the projects would be 

“funded from a variety of sources,” including not only EB-5 funds but also government bonds, 

loans from banks and a broker-dealer, as well as substantial equity contributions from Xia.  

These representations were false, which Defendants knew or were reckless in not knowing were 

not true.  In fact, EB-5 investor money was essentially the only source of funding, which created 

a significant funding shortfall that Defendants knew or should have known was inevitable.   

8. Third, the Defendants told investors that the “Management and Development” 

team for the projects consisted of Xia and the Racanelli Construction Group, Inc. (“Racanelli”).  

The Offering Memoranda stated that Racanelli was “one of the region’s leading providers of 

preconstruction planning, project management, design/build, and general contracting services,” 

and that Racanelli, “[s]ince its founding,” had completed numerous projects, including 

“corporate headquarters, industrial complexes, hospitals,” and many other types of buildings.  

The Business Plans and marketing brochures further represented that Racanelli had “six decades” 

of construction experience.  None of this was true.  In fact, Racanelli was created in 2011 and 

had no track record other than serving as Xia’s in-house construction company.  Moreover, the 

description of Racanelli’s experience was lifted almost verbatim from the website of another 

construction company, Racanelli Construction Company Inc. (the “Original Racanelli”), whose 

name and reputation Defendants sought to co-opt by appropriating its name for their construction 

entity.  While the Offering Memoranda and Business Plans extol Xia as having extensive 

experience in real estate development, Xia himself had limited experience as a developer—

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before Eastern Mirage he had completed construction of only one small apartment building—and 

he was ill-equipped to manage the construction of the large-scale projects, as Defendants knew 

or should have known. 

9. Fourth, the Defendants told investors that the hotels that were part of the projects 

would be affiliated with the well-known Westin Hotel chain, which Defendants knew was not 

true. 

10. Fifth, the Defendants intentionally exaggerated the size of the Eastern Emerald 

Project.  The Defendants told investors that the project would cover more than 1.1 million square 

feet, but Defendants knew this was false.  Documents submitted to the Department of Buildings 

in 2015, and signed by Xia, show that Xia only sought approval to build a project of about 

350,000 square feet. 

11. Finally, the Offering Memoranda stated that there were “no material conflicts of 

interest between the General Partner and its affiliates on the one hand and the Partnership on the 

other hand” and that the General Partner “is accountable to the Partnership as a fiduciary and 

consequently must exercise good faith and integrity in handling the Partnership’s affairs.”  As 

the President, Chief Executive Officer and Managing Member of the General Partner, Xia had a 

fiduciary duty to the Partnerships.  However, Defendants failed to disclose material conflicts of 

interest to the investors.  Specifically, Xia, who was on both sides of the agreements, caused the 

developers of the Eastern Mirage and Eastern Emerald Projects to enter into rental agreements 

with the entities that own the land for the projects.  The developers have never made any rental 

payments and have been in default for years: one owes at least $16.5 million and the other owes 

at least $42.2 million.  Because Xia owns and controls all four entities – the developers and the 

owners of the land – and can exercise his right to demand payment at any time, Xia has the 

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unfettered right to trigger the default provisions in the rental agreements that would bankrupt the 

developers and leave the investors empty-handed.  Alternatively, if the projects are sold, Xia 

could enforce the nearly $60 million in payment obligations the developers owe, which will 

reduce the amount available for the developers to return to investors.   

12. To further the Defendants’ scheme and conceal their conduct, Xia opened more 

than 150 bank accounts which he controlled and through which investor funds flowed.  Although 

Yue is a signatory or co-signatory (with Xia) on many of these accounts, she appears to act 

primarily at Xia’s direction.  Xia has exercised this control to direct numerous transfers between 

and among these accounts in circular, multi-step transactions that appear to have no legitimate 

business purpose.  Xia directed over $127 million in investor funds to Racanelli and another 

general contractor he controls.  Of that amount, Xia re-directed a total of at least $85.9 million to 

accounts of other entities he controls.  Of the $85.9 million, there are no invoices or other 

support for approximately $43.6 million of these transfers.  Moreover, the invoices from Xia’s 

entities to the general contractors ostensibly supporting approximately $32.2 million of the 

transfers appear spurious.  Additionally, the majority of this money does not appear to have been 

spent on Project-related expenses. 

13. 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.    

14. The investors remain at significant and immediate risk.  Since 2018, many 

investors have been demanding the return of their funds, including through lawsuits.  To date, no 

investor has received his or her capital contributions back.  And given that the projects consist of 

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an unfinished building and a hole in the ground with insufficient funds to complete either project, 

the prospects for investors to receive their capital contributions back are remote at best.    

15. Moreover, Xia and his companies are currently under significant financial 

exposure, including from a dozen pending project-related lawsuits brought by EB-5 investors, 

injured workers, unpaid contractors, ConEdison, and the City of New York.  In May 2021, Xia 

wrote to some investors to say that he was planning the “termination and dissolution” of one of 

the limited partnerships.  And in recent months, Xia has offered payments to some investors to 

settle pending litigations, stating that he may wind up some of the limited partnerships. 

16. 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.  For 

example, in May 2021, Xia used $10 million of investor funds as collateral to secure a bank line 

of credit in the name of EEG, and siphoned off $5.6 million off to Yue’s personal account (see 

supra paragraph 13).  

17. As a result, the SEC seeks several forms of emergency and preliminary relief, 

including an asset freeze, the appointment of a Monitor, sworn accountings, and expedited 

discovery.   

VIOLATIONS 

18. By virtue of the foregoing conduct and as alleged further herein, Defendants Xia 

and Fleet have violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 

§ 77q(a)], and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 

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U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

19. Yue, the Relief Defendant, has received at least $9.7 million in ill-gotten gains 

from the Defendants’ fraud. 

20. Unless Defendants are restrained and enjoined, they will continue to engage in the 

acts, practices, transactions, and courses of business set forth in this Complaint or in acts, 

practices, transactions, and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

21. The SEC brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act 

Sections 21(d) [15 U.S.C. § 78u(d)] and 21A(a) [15 U.S.C. § 78u-1(a)].  

22. The SEC seeks a final judgment: (a) permanently enjoining Defendants from 

violating the federal securities laws and rules that this Complaint alleges they have violated; 

(b) ordering Defendants and Relief Defendant to disgorge all ill-gotten gains they received as a 

result of the violations alleged herein and to pay prejudgment interest thereon; (c) ordering 

Defendants to pay civil money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. 

§ 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; and (d) ordering any other 

and further relief the Court may deem just and proper.  

23. To maintain the status quo and preserve assets sufficient for Defendants to pay 

disgorgement, prejudgment interest, and civil money penalties and for Relief Defendant to pay 

disgorgement and prejudgment interest in accordance with any final judgment of this Court, the 

SEC further seeks emergency relief during the pendency of this action, including: (a) an asset 

freeze; (b) the appointment of a Monitor; (c) sworn accountings; and (d) expedited discovery. 

 

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JURISDICTION AND VENUE 

24. This Court has jurisdiction over this action pursuant to Securities Act Section 

22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].  

25. Defendants, directly and indirectly, have made use of the means or 

instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, 

practices, and courses of business alleged herein. 

26. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] 

and Exchange Act Section 27 [15 U.S.C. § 78aa].  Defendants may be found in, are inhabitants 

of, or transact business in the Eastern District of New York, and certain of the acts, practices, 

transactions, and courses of business alleged in this Complaint occurred within this District. 

DEFENDANTS1 

27. Xia, age 52, a resident of Flushing, NY, is the co-owner, CEO, President, and 

Managing Member of Fleet.  Xia attended a university in China where he obtained a degree in 

industrial management engineering.  Xia also has a master’s degree from the University of 

Alabama.  Xia immigrated to the United States in 1996 and became a United States citizen four 

years ago.  Xia owns (or co-owns with his wife, Relief Defendant Yue) and controls all the 

entities listed in paragraphs 31-48 (the “Xia Entities”).   

28. Fleet, a New York limited liability company, was formed by Xia on February 5, 

2010.  The USCIS, part of the U.S. Department of Homeland Security, approved Fleet for 

designation as a regional center in the Immigrant Investor Program on October 7, 2010.  Fleet is 

                                                 
1  Defendants Xia and Fleet entered into tolling agreements that tolled and suspended the 
running of any statute of limitations for the period beginning September 10, 2019 through March 
9, 2020.   
 

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the General Partner for the five limited partnerships listed in paragraphs 31-36.  

29. Xia acted by and through Fleet and, accordingly, Xia’s conduct should be imputed 

to Fleet.  

RELIEF DEFENDANT 

30. Yue, age 41, a resident of Flushing, NY, is the wife of Xia.  Yue was also the 

authorized signatory on dozens of bank accounts and she authorized funds transfers and signed 

lease and loan agreements on behalf of various entities that Xia owns and controls.  See Exhibit 

C (list of Xia-controlled bank accounts and signatories).  It appears that Yue acted primarily at 

Xia’s direction. 

OTHER RELEVANT ENTITIES 

The Limited Partnerships and the Developers (FFG, EEG, and LaGuardia) 

31. EMMCO, L.P. (“EMMCO”) is a New York limited partnership formed by Xia 

on April 9, 2010.  Under a Loan Agreement dated July 14, 2010, EMMCO agreed to loan $8 

million in EB-5 investor funds, at 0% interest, to Fleet Financial Group, Inc. (“FFG”), a New 

York corporation owned and controlled by Xia, so that FFG could “develop [and] construct 

Phase I” of the Eastern Mirage Project, referred to as the “Eastern Mirage Center.”  Phase I was 

supposed to include a “conference center, spa/fitness center, restaurant and parking garage.”   

Yue signed the Loan Agreement for EMMCO and Xia signed for FFG. 

32. EMMCO NQMC, L.P. (“EMMCO NQMC”) is a New York limited partnership 

formed by Xia on December 22, 2010.  Under a Loan Agreement dated June 26, 2013, EMMCO 

NQMC agreed to loan $35.5 million in EB-5 investor funds, at 0% interest, to FFG so that FFG 

could “develop [and] construct Phase II” of the Eastern Mirage Project, referred to as the “North 

Queens Medical Center.”  Phase II was supposed to include a “state of the art medical facility.”   

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Yue signed the Loan Agreement for EMMCO NQMC and Xia signed for FFG. 

33. EMMCO TOWER, L.P. (“EMMCO TOWER”) is a New York limited 

partnership formed by Xia on June 10, 2011.  Under a Loan Agreement dated December 8, 2014, 

EMMCO TOWER agreed to loan $12.5 million in EB-5 investor funds, at 0% interest, to FFG so 

that FFG could “develop [and] construct Phase III” of the Eastern Mirage Project, which was 

supposed to be a luxury hotel.  Yue signed the Loan Agreement for EMMCO TOWER and Xia 

signed for FFG. 

34. EEGH, L.P. (“EEGH”) is a New York limited partnership formed by Xia on 

December 6, 2013.  Under a Loan Agreement dated December 18, 2013, EEGH agreed to loan 

$80 million in EB-5 investor funds, at 2% interest, to Eastern Emerald Group, LLC (“EEG”), 

a Delaware limited liability company formed by Xia on December 6, 2013 for the development 

of the Eastern Emerald Project.  In June 2018, Xia changed the name of EEG to The Grand 

Eastern Mirage Group LLC.  The loan to EEG was supposed to allow EEG to “develop, 

construct and operate a commercial mixed-use project that includes a 5-star hotel, convention 

center, parking garage, restaurant and retail space.”  Xia signed the Loan Agreement for EEGH 

and Yue signed for EEG. 

35. An “Amendment No. 1” to the EEGH-EEG Loan Agreement, dated October 21, 

2015, increased the loan from $80 million to $110 million.  Xia signed Amendment No. 1 to the 

Loan Agreement for both EEGH and EEG. 

36. EEGH II, L.P. (“EEGH II) is a New York limited partnership formed by Xia on 

September 10, 2015.  Under a Loan Agreement dated October 18, 2015, EEGH II agreed to loan 

“up to $80 million” in EB-5 investor funds, at 1% [or 2%] interest, to LaGuardia Performance 

Center, LLC (“LaGuardia”), a Delaware limited liability company formed by Xia on September 

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25, 2015, for the development of the expansion of the Eastern Emerald Project.  The loan was 

supposed to allow LaGuardia to “develop, construct and operate the expansion to a 5-star hotel, 

which will result in an additional 556,398 SF being added to the overall building, an additional 

294 5-star luxury hotel rooms, an additional 4 floors added to the building; a performing arts 

center across 5 floors; as well as additional retail space, restaurant space and parking garage 

space.”  Xia signed the Loan Agreement for EEGH II and Yue signed for LaGuardia. 

37. The EMMCO, EMMCO NQMC and EMMCO TOWER Offering Memoranda 

stated that the loans mature “five (5) years from the date of the first advance under the loan,” 

which would have been in August 2015 for EMMCO, April 2016 for EMMCO NQMC, and 

December 2018 for EMMCO TOWER.   

38. The EEGH and EEGH II Offering Memoranda stated that the loans for the 

Eastern Emerald Project mature “at the date of (1) five (5) years from the date of the last advance 

under the loan, or (2) the date all EB-5 investors have ceased participating in the EB-5 program, 

whichever is later.” 

39. The borrowers (FFG, EEG, and LaGuardia), which are the developers that Xia 

also owns and controls, have not made any loan repayments to the limited partnerships. 

Additional Entities Xia Owns, Co-Owns and/or Controls 

40. Amazon River, LLC (“Amazon River”), a Delaware limited liability company 

formed on June 29, 2015, is owned and controlled by Xia. 

41. Fleet General Insurance Group Inc. (“Fleet Insurance”), a Vermont corporation 

created on October 13, 2017, is owned and controlled by Xia. 

42. JiQing Development, Inc. (“JiQing Development”), a New York corporation 

formed on July 28, 2005, is co-owned by Xia and Yue and controlled by Xia.   

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43. Manekineko Group, LLC (“Manekineko Group”), a New York limited liability 

company formed on February 3, 2010, is owned and controlled by Xia. 

44. Perini Group, Inc. (“Perini”), a New York corporation formed on December 2, 

2015, is controlled by Xia. 

45. Racanelli, a New York corporation formed on June 21, 2011, is controlled by 

Xia. 

46. Shangri-La 9D, Inc. (“Shangri-La 9D”), Shangri-La 9F, Inc. (“Shangri-La 

9F”), and Shangri-La Green, Inc. (“Shangri-La Green”), New York corporations formed on 

March 8, 2010, are owned and controlled by Xia. 

47. Samuel Development Group, LLC (“Samuel Development”), a New York 

limited liability company formed on August 3, 2005, is owned and controlled by Xia. 

48. X & Y Development Group, LLC (“X&Y”), a New York limited liability 

company formed on September 20, 2007, is owned and controlled by Xia.  In 2007, X&Y 

acquired the Eastern Emerald Project land on Northern Boulevard in Queens, NY. 

FACTUAL ALLEGATIONS 

I. The Securities Offerings and the Structure of the Limited Partnerships 

49. From early 2010 through late 2017, through five separate offerings, the 

Defendants solicited EB-5 Program investments in two mixed-use real estate projects: the 

Eastern Mirage Project and the Eastern Emerald Project.   

50. The EMMCO offering, from August 2010 through January 2014, raised $8 

million from 16 EB-5 Program investors.  According to its Offering Memorandum, the EMMCO 

funds were to “be used to finance Phase I of the Eastern Mirage Project,” described as the 

“Eastern Mirage Center,” which was to include a spa and fitness center, a multimedia conference 

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center, a restaurant, and a public parking garage with 256 parking spaces.  The Offering 

Memorandum further stated that the Easter Mirage Center “will be completed and be generating 

income and creating jobs by the third or fourth quarter of 2012.” 

51. The EMMCO NQMC offering, from January 2011 through April 2012, raised 

$35.5 million from 75 EB-5 Program investors.  According to its Offering Memorandum, the 

EMMCO NQMC funds were to be used “to finance Phase II of the Eastern Mirage Project,” 

consisting of “the North Queens Medical Center [which] will be completed and be generating 

income and creating jobs by the third or fourth quarter of 2013.” 

52. The EMMCO TOWER offering, from December 2011 through January 2014, 

raised $12.5 million from 25 EB-Program investors.  According to its Offering Memorandum, 

the EMMCO TOWER funds were to be used “to finance Phase III of the Eastern Mirage 

Project,” consisting of the Eastern Mirage Tower [which] will be completed and be generating 

income and creating jobs by the third or fourth quarter of 2013.”   

53. The EEGH offering, from March 2014 through December 2015, raised $110 

million from 220 EB-5 Program investors.  According to its Offering Memorandum, the EEGH 

funds were to be used “to finance the development, construction and operation” of the Eastern 

Emerald Project, consisting of “a 498-room 5-star luxury hotel, retail stores (97,180 square feet), 

and IAC certified international conventional [sic] center (105,964 square feet), a restaurant 

(11,300 square feet), and a parking garage with 400 parking spaces covering 82,490 square feet.”   

54. The EEGH II offering, from October 2015 to October 2017, raised $63 million 

from 126 EB-5 Program investors.  The Offering Memorandum for EEGH II described a 

significant “expansion” of the Eastern Emerald Project from the 643,180 square feet in the 

“original building” to 1,199,578 square feet.  According to the EEGH II Offering Memorandum: 

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“The completed building will have a total of 792 5-star luxury hotel rooms equal to 730,049 SF 

across all 29 floors; as well as a 1-story, 105,964 SF convention center; a 5-story, 78,954 SF 

performing arts center; 136,269 SF of retail space across 6 floors; 57,531 SF of restaurant space 

across 5 floors; and a 1-story, 90,811 SF parking garage.”  

55. Investors in each of the five offerings were solicited with an Offering 

Memorandum, which included and incorporated the LP Agreement, a Business Plan, and other 

marketing materials.  Xia reviewed the Offering Memorandum and the Business Plan for each 

offering.  He had final authority to approve these documents, and he approved them for 

distribution to investors. 

56. The investments, which were structured as limited partnership “units,” are 

securities. 

57. The Offering Memoranda all stated that the “investors investing under the EB-5 

Program will become Limited Partners of the Partnership by (i) completing and delivering the 

subscription documents, including the Subscription Agreement and the Investor Questionnaire, 

in the forms attached hereto as Exhibit IV, which may be accepted by the General Partner in its 

sole discretion, (ii) executing and delivering a counterpart signature page to the Partnership 

Agreement, and (iii) making a capital investment in the Partnership Agreement in the amount of 

US$500,000, along with a processing fee in the amount of US$50,000.”  The offices of the 

Partnership and the General Partner were identified in the Offering Memoranda as being located 

in Flushing, New York. 

58. The Offering Memoranda all stated that the investors’ capital contributions are 

intended to be used for a loan to the respective developer to finance the phase of the project for 

which the funds were raised.  The Offering Memoranda further provided that the “Borrower 

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intends to repay the loan at maturity with the proceeds of long term financing or from other 

sources.” 

59. Although the loans from EMMCO, EMMCO NQMC and EMMCO TOWER to 

Fleet were at zero percent interest, the investors had an expectation of profit.  The Offering 

Memoranda for the Eastern Mirage offerings provided that “net proceeds (if any) realized from 

the distribution of profit realized from the Partnership’s investment, sale, exchange or other 

disposition of the business of the Partnership or any portion thereof, will be allocated and 

distributed 100% to the Limited Partners up to the amount of each Limited Partner’s original 

capital contribution.  Thereafter, such amounts will be allocated and distributed 99% to the 

General Partner and 1% to the Limited Partners.  Interest income, after deducting Partnership 

expenses will be allocated and distributed 99% to the General Partner and 1% to the Limited 

Partners.” 

60. The EB-5 funds raised from the EEGH and EEGH II offerings were loaned at 2% 

interest to EEG and LaGuardia, respectively, for development of the Eastern Emerald Project. 

The Offering Memoranda for the Eastern Emerald offerings provided that “net proceeds (if any) 

realized from the distribution of profit realized from the Partnership’s investments will be 

allocated and distributed 90% to the Limited Partners and 10% to the General Partners.” 

61. The EB-5 Program investors were passive, and any returns they received would 

come not from their efforts but from the efforts of Xia, Fleet and other entities Xia controlled. 

II. Xia Controlled Fleet and the Limited Partnerships 

62. The LP Agreements gave Xia, as the President, CEO and Managing Member of 

the General Partner Fleet, broad and expansive authority to act on behalf of each Partnership, to 

represent and bind each Partnership, and “to do any and all things necessary for, incidental to or 

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connected with carrying out the activities of the Partnership.”   

63. The LP Agreements also authorized the General Partner to “raise capital for the 

Partnership by offering for sale and selling Units,” and to “do all things in that regard in the 

name of and on behalf of the Partnership, including preparing and filing such offering or other 

documents as the General Partner determines to be necessary or desirable, and all things done by 

the General Partner are hereby ratified and confirmed.”  

64. The LP Agreements for each offering, which were attached as exhibits to the 

Offering Memoranda, stated that the General Partner has the authority to “represent and bind” 

the Partnerships; to do “any and all things” regarding the partnerships; and to “make all decisions 

regarding the Partnerships.  The parties to the LP Agreements were the investors, Fleet, and Xia, 

who was designated as the “Original Partner.”   

65. The Offering Memoranda for each offering further stated that the “General 

Partner exercises ultimate authority for overall management of the Partnership and is responsible 

for its day to day operations” and “may retain such other suitable parties to provide services to 

the Partnership, including, without limitation, legal, consulting, marketing, administration, and 

accounting services.”  

III. The Defendants’ Scheme to Defraud 

66. The Defendants engaged in a scheme to solicit funds from investors and to 

misappropriate and misuse those funds, and they engaged in manipulative and deceptive acts in 

furtherance of this scheme, including material misrepresentations and omissions. 

67. The Defendants used the means or instrumentalities of interstate commerce or of 

the mails in connection with the conduct described herein, including through communications 

with investors and their agents in China, and with certain of the investors and their agents or 

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representatives located across the United States. 

68. Xia was actively involved in the solicitation of investors, and he travelled to 

China to promote the offerings.  

69. During a 2014 trip to China, Xia approved a script drafted by a colleague to be 

used to promote the Eastern Emerald Project to potential investors.  In a July 25, 2014 email to 

Xia, the colleague noted that the script was “modified slightly from the version you approved in 

the spring (to reflect the brochure [Xia Entity Employee A] gave me and ou[r] discussion 

yesterday).  Please let me know of any changes/corrections you wish to see. . . Here come the 

remarks.”   

70. The “remarks” read, in part (emphasis in original): 

I am very pleased to be back in China with an attractive real estate development 
opportunity to share with you.  On my first visit, great project Eastern Mirage/Westin 
Hotel . . . track record 100% permanent residency approvals, but no confirmed next 
project. Now, we have next project. 
 
Boutique Regional Center that works exclusively and hand-in-glove with Fleet Financial 
Group[.] 
 
Because FNYMRC and Fleet Financial Group are team working solely on NYC real 
estate developments together, we have deep experience in this field.  Based on this 
experience, we believe that Eastern Emerald’s LaGuardia Convention is a rare and 
special opportunity in New York.  It is: 
 

600,000 sq. foot, mixed use development across the street from LAG that would 
consist of a 300,000 square foot exhibition center, 200,000 square foot meeting 
space, 800 hotel rooms – plus restaurants, retail space and a 500 spaces of 
underground parking[.]  
 
The project will benefit from the support of community leaders and NY State and 
the U.S. government in the form of[] $45 million in tax credits[.] 

 
As a potential EB-5 investor you would be an important part of this project, but only a 
part.  The $75 million investment from 150 investors could comprise less than one-third 
of the projected $228 million development budget.  (State, Federal govt, a bank and Fleet 
Financial would all have large stakes, too). 
 

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Invest[m]ent mindset – this is a compelling investment opportunity in its own right  
 
71. Xia replied to the email as follows: “everything is fine except the total eb-5 is 

now $80 million and total construction cost $233 million.” 

72. As shown in greater detail below, nearly all the representations in the script, as 

well as many in the written materials provided to investors, were false.  Westin Hotel was not 

involved; Fleet did not have “deep expertise;” the Eastern Emerald Project was not 600,000 

square feet; and neither the federal nor state governments, nor any bank, nor even Fleet or FFG 

had “large stakes.”  Moreover, the EB-5 investors were not “only a part” of the project’s funding, 

they were providing substantially all of the funding.   

73. Defendants violated the federal securities laws through multiple means.  

Defendants made material misrepresentations and omissions to investors about the sources of 

funding for the projects; the capabilities and experience of Xia and the development team; the 

projects’ affiliation with the Westin Hotel chain; and the size of the Eastern Emerald Project.  

Defendants also concealed the rental agreements between the developers and the owners of the 

projects’ land, even though these agreements materially impacted the investors’ security and 

ability to recover their investments.  Xia also controlled the flow of funds to benefit himself; and 

concealed important information from investors. 

A. Defendants’ Misappropriated and Misused Investor Funds 

74. Under the Offering Memoranda, the investors’ $500,000 capital contributions 

were to be used only for the particular phase of the project for which the funds were raised.   

75. The Offering Memoranda stated that the “Partnership’s Loan will be used to 

finance [the particular phase] of the project.”  Consistent with the Offering Memoranda, the Loan 

Agreements, in a provision named “Mandatory Use of Proceeds,” stated that: “Borrower agrees 

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that the proceeds of the Loan shall only be used for the development, construction and operation 

of the Project.”  The phrase “Project” is defined to mean the Eastern Mirage Center in the 

EMMCO Loan Agreement; the North Queens Medical Center in the EMMCO NQMC Loan 

Agreement; the Eastern Mirage Tower in the EMMCO TOWER Loan Agreement; and the 

Eastern Emerald Project in the EEGH and EEGH II Loan Agreements.    

76. This limitation was material because it assured investors that the funds for one 

project would not be used for another project that the investor did not contribute to. 

77. On multiple occasions, Defendants misappropriated or misused investor funds. 

78. First, Xia’s company EEG acquired the Eastern Emerald land on Northern 

Boulevard in December 2013 for approximately $17 million.  Xia, however, fraudulently used 

funds from Eastern Mirage investors to purchase this land.  This misappropriation was 

accomplished through two series of circuitous bank transfers in June and December 2013.  First, 

in June 2013, $1.7 million was transferred from EMMCO NQMC bank accounts to a FFG 

account, then to a Racanelli account, and then to an EEG bank account before being transferred 

to the escrow agent for the seller of the Eastern Emerald land.  In December 2013, approximately 

$15.3 million was transferred from EMMCO TOWER and EMMCO NQMC bank accounts to 

FFG accounts, then to Racanelli accounts, and then to an EEG bank account, before being 

transferred to the seller of the Eastern Emerald land.  Xia directed all these transfers, either 

directly or by directing Yue to do so.  See Exhibit D (chart tracing Eastern Mirage funds cycling 

through multiple accounts for Eastern Emerald land purchase).  

79. Second, Xia used at least $11.8 million in Eastern Emerald investor funds for the 

Eastern Mirage Project.  In early 2014, only approximately $4.25 million of the funds from the 

Eastern Mirage offering remained.  The funds available for construction of the Eastern Mirage 

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Project were nearly depleted, in part as a result of the 2013 misappropriation of approximately 

$17 million described in the previous paragraph.  To solve this problem, from 2014 to 2019, Xia 

used at least $11.8 million of funds raised from Eastern Emerald investors to pay for costs 

associated with the Eastern Mirage Project. 

80. Third, Xia misappropriated investor funds for personal purposes.  In 2012, Xia 

used approximately $819,809 in EMMCO funds to pay off a mortgage on a building located at 

57-35 Lawrence Street, Queens, NY.  As with the other misappropriations, and apparently in an 

effort to mask the purpose of the transfers, the funds were transferred from an EMMCO account 

to and through FFG, Racanelli and JiQing Development accounts, before being used to satisfy 

the mortgage.  The memo on the check states “Loan payoff #18 71-8 57-35 Lawrence.”  See 

Exhibit E. 

81. Fourth, in July 2015, in a similar pattern of transfers—the investor funds cycled 

through EEGH, EEG, Racanelli and Amazon River accounts—Xia transferred approximately 

$2.3 million to an escrow agent for a luxury apartment at One Madison Park in Manhattan.  

Although the funds were returned to Amazon River in early 2016, Xia did not return the funds to 

EEG, but allocated the returned funds to accounts of other entities he controlled.  Additionally, 

the investor funds were not available for the Projects and were at risk during the period of time 

they were misappropriated.  See Exhibit F.  

82. Fifth, in January 2021, EEG received a check for $10,968,787.48 from the New 

York State Comptroller Refund Account, which appeared to be a tax credit for the Eastern 

Emerald Project.  These funds were deposited into CTBC Bank and used by Xia to purchase a 

$10 million certificate of deposit in the name of EEG.  In an April 2021 loan agreement signed 

by Xia, EEG borrowed $10 million from CTBC Bank and used the CD as collateral.  Between 

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April 30, 2021 and May 25, 2021, $5.6 million of the $10 million loan was transferred into 

Yue’s personal account.  These funds should have been used for the Eastern Emerald Project. 

The EEGH Offering Memorandum stated that $38 million in “Tax Credits” were a funding 

source.  However, Xia misappropriated over $5 million of those monies for his personal benefit. 

83. As these transactions show, Xia believed he was entitled to use investor money to 

benefit himself and he treated EB-5 investor funds as his own money.  Xia stated as much in an 

email dated June 2, 2020.  At the time, Xia wanted to obtain a residential mortgage from 

Financial Firm A that offered residential mortgages only to clients.  Financial Firm A required a 

prospective client to make a minimum deposit.  Xia proposed using an account holding “loan 

proceeds from my EB-5 entity” to satisfy the minimum, but the firm responded that “if its [sic] 

EB5 money unfortunately it doesn’t work.  It has to be yours personally/ your family’s money.”  

Xia replied: “What is the definition of Eb-5 money? It is in the bank account of my entity and I 

use my property as collateral for it.  If [the firm] lends me money and deposit into my bank 

account with my hotel as collateral [w]ill it still be considered as [firm] money or [] 

investor/Deposit money?  I feel it is a loosely defined term to call it eb-5 money…” 

84. Xia also authorized at least $1.6 million in transfers for purposes unrelated to 

either project.  For example, there were over $840,000 in payments for apartments in Manhattan 

rented by Yue; at least $76,000 in retail store purchases, including at Amazon, Apple, Best Buy, 

Macy’s, Nordstrom, and Pioneer Home Electronics; approximately $49,760 for food shopping 

and restaurants, including Whole Foods and Fresh Direct; and over $14,000 in hotel charges, 

including luxury hotels in Hawaii.    

85. Xia received over $700,000 in payments through a payroll firm from 2011 

through 2020, as well as at least $125,000 in other transfers, traceable to investor funds.   

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B. Misrepresentations About The Sources of Funding For The Projects  

86. The Offering Memoranda stated that the projects would be funded not just 

through the EB-5 Program investors’ funds but through “a variety of sources.”  This disclosure 

was material because having multiple funding sources made the investment appear safe and the 

prospects of the projects’ completion more certain.     

87. In the 2014 pitch script that Xia approved, Xia also emphasized as a key point that 

investors would only pay “a part of” the project cost because of all the support from 

governments, banks and others.   

88. Defendants made material misrepresentations regarding non-investor sources of 

funding, which they knew were false when made.  In fact, nearly all of the funding for both 

projects came from the EB-5 investors.   

89. The EMMCO, EMMCO Tower and EMMCO NQMC Offering Memoranda all 

contain the following paragraph: 

The Eastern Mirage Project is intended to be funded from a variety of sources including a 
bank loan from [Bank A], N.A., a NYC Capital Resource Corp. (“NYCCRC”) triple tax-
exempt bond financing and EB-5 immigrant investment.  The Eastern Mirage Project is 
financed by a $9,000,000 bank loan from [Bank A] at an interest rate equal to the sum of 
(i) 3.25% plus (ii) the 30-day London Interbank Offered Rate (LIBOR).  The Eastern 
Mirage Project is also being financed by a $17,000,000 triple tax-exempt bond financing 
authorized under the American Recovery and reinvestment Act of 2009.  The program is 
administered by the NYCCRC and the NYC Industrial Development Agency, both of 
which are staffed by the New York City Economic Development Corporation. 

 

90. The EMMCO Offering Memorandum - which estimated the “current budget for 

hard construction costs for the Eastern Mirage Project” at $88 million - also stated: 

The Eastern Mirage Project costs are expected to be financed as follows: 
EB-5 Immigrant Investor Capital   (Up to) $57,500,000 
NYCCRC Recovery Zone Facility Bonds    $17,000,000 
[Bank A] Loan       $  9,000,000 
Other Investment Sources      $14,000,000 

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Total Investment in Project      $97,500,000 
 

91. The EMMCO NQMC and EMMCO TOWER Offering Memoranda repeated the 

same Eastern Mirage Project funds sources as in paragraph 89, with two changes.  First, the 

$9,000,000 loan was to be from Bank B - not Bank A.  Second, the Offering Memoranda 

included the statement that in addition to the $17,000,000 in NYCCRC Bonds, “[u]p to an 

additional $12,000,000 in NYCCRC Recovery Zone Facility bond financing is available if 

needed.” 

92. As Defendants knew, the representations in the three EMMCO Offering 

Memoranda about non-EB-5 financing were false or misleading. 

93. Defendants knew that the representations about receiving the NYCCRC bonds 

were false.  An allocation of NYCCRC bonds for the Eastern Mirage Project was approved in 

2009, but Xia turned down the allocation.  A letter to the NYCCRC from Xia’s counsel dated 

December 6, 2010 stated that Xia “shall not be seeking to use the allocation of $17,000,000 of 

Recovery Zone Facility Revenue Bonds that has been made available to it.”   

94. As a result, on December 7, 2010, Xia received a letter from NYCCRC 

terminating Eastern Mirage’s Recovery Zone Facility bond allocation which also stated that the 

bond program would expire on December 31, 2010.  Despite knowing that the NYRCCRC bonds 

would not be issued, the Defendants’ marketing materials and Offering Memoranda, including 

the EMMCO NQMC and EMMCO Tower Offering Memoranda which were dated January 31, 

2011, continued to tout the government bonds as a funding source to Eastern Mirage investors.  

A reasonable investor would find the representation that the project was backed by government 

bonds to be material. 

95. In addition, there was no loan from Bank A when the Defendants stated in the 

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Offering Memoranda that: “The Eastern Mirage Project is financed by a $9,000,000 bank loan 

from Bank A at an interest rate equal to the sum of (i) 3.25% plus (ii) the 30-day London 

Interbank Offered Rate (LIBOR).”  In fact, neither Bank A nor Bank B provided a loan to the 

Eastern Mirage Project.   

96. The EEGH Offering Memorandum estimated the total projected costs of the 

Eastern Emerald Project to be $190 million, and represented the following: 

The Eastern Emerald Project costs are expected to be financed as follows: 
 
Loan Proceeds from EB-5 Funds    $80,000,000 
Tax Credits      $38,000,000 
Loan from [Broker Dealer A]    $72,000,000 
Total Investment in Project    $190,000,000 
 

97. The EEGH Supplemental Offering Memorandum contained the following 

disclosure: 

The total project costs for the Eastern Emerald Project of One Hundred and 
Ninety Million Dollars ($190,000,000) shall be financed as follows: 
 
Loan from New Commercial Enterprise, EEGH, L.P.: $110,000,000 
Brownfield Tax Credit:     $21,200,000 
New Market Tax Credit     $18,000,000 
Equity from Developer:     $40,800,000 
  TOTAL PROJECT COSTS:   $190,000,000 
 

98. The EEGH II Offering Memorandum set the budget for the expanded “Eastern 

Emerald Project II” at $181,413,011, and further stated: 

The Eastern Emerald Project II costs are expected to be financed as follows: 
Loan Proceeds from EB-5 Funds    $80,000,000 
NYS Tax Credits      $17,000,000 
Capital Contribution from Developer    $44,413,011 
Loan from [Broker Dealer A]     $40,000,000 
Total Investment in Project     $181,413,011 
 

99. None of these sources contributed funds to the Eastern Emerald Project (with the 

possible exception of the Brownfield Tax Credit), which Defendants knew or should have known 

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at the time the Offering Memoranda was provided to investors. 

100. The EEGH Supplemental Offering Memorandum stated definitively that the New 

Market Tax Credit “shall” fund $18 million for the Eastern Emerald Project.  Xia, however, not 

only never received the New Market Tax Credit, he never even seriously pursued it.  Xia merely 

had his lawyer respond to an inquiry about project funding from USCIS by providing a “letter of 

interest” dated November 14, 2013 from an employee of Financial Firm B.   Xia had Yue call 

Financial Firm B and ask for the letter of interest regarding the New Market Tax Credit.  Xia 

never actually pursued the New Market Tax Credit after obtaining the letter of interest.  

101. The EEGH Offering Memorandum also represented that Broker Dealer A was 

“expected” to provide a $72 million loan, and the EEGH II Offering Memorandum represented 

that Broker Dealer A was expected to make a $40 million loan.  However, there was never any 

loan from Broker Dealer A.      

102. In a September 17, 2017 “Request for Evidence,” USCIS wrote to Xia’s EB-5 

counsel that “[t]he Business Plan does not present evidence that the $40 million loan from 

[Broker Dealer A]  . . . has been secured or is readily available. . . . The credibility of the 

project’s future would be enhanced with evidence on non-EB-5 funding sources.  Therefore, 

please submit then following: Projected non-EB-5 funds and their source if applicable (e.g., 

developers, municipal bonds, loans, etc.); Secure commitment from non-EB-5 investors if 

applicable (contracts, bonds, loans, letter of confirmation from the lender, other sources, etc.).” 

103. The response from Xia’s lawyer said nothing about a $40 million loan from 

Broker Dealer A.  Instead, the lawyer reported that “LaGuardia Performance Center, LLC has 

already obtained a construction loan commitment letter dated August 18, 2017 issued by [Broker 

Dealer B].”  The loan commitment purportedly from Broker Dealer B was $85 million, and the 

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letter pointed out that if the loan is granted then the project “will be well covered.”   

104. Xia’s attorney attached the $85 million loan commitment letter from Broker 

Dealer B to her letter.  The letter was from Registered Representative A, an employee of Broker 

Dealer B, who was identified in the letter as Head of Public Finance, to Xia.  The letter from 

Registered Representative A was not authentic.  Although Registered Representative A worked 

at Broker Dealer B in August 2017, his title was not “Head of Public Finance.”  In addition, the 

letterhead used for the purported Broker Dealer B’s letter is not authentic.  Moreover, Broker 

Dealer B was a small, family-owned broker-dealer that was not in the business of making 

construction loans and it never considered making any loan to Xia or his company. 

105. The representations in the EEGH Supplemental Offering Memorandum and in the 

EEGH II Offering Memorandum that the “[d]eveloper” - meaning entities controlled by Xia - 

was expected to contribute a “capital contribution” or “equity” of $40.8 million and $44.4 

million, respectively, were also false.  Neither Xia nor his entities ever contributed such funds to 

the projects, and Defendants knew or were reckless in not knowing, at the time these 

representations were made, that Xia did not have and could not reasonably expect to have the 

financial ability to make anything more than a nominal contribution of his own funds.  

According to bank records, the only non-investor funds that Xia and his entities contributed to 

the projects totaled approximately $3.5 million.   

C. Misrepresentations Regarding Xia and the Development Team 

106. For an investor in a real estate project, the experience and track record of the 

developer is material.  

107. The Offering Memoranda for the five offerings contain detailed descriptions of 

“[t]he Project management and development team.”  Xia was described as being “active for ten 

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years in land acquisition, commercial and residential development, marketing research, value-

added strategies, financing, property management and leasing, and other related activities.”   

108. The Offering Memoranda for each of the five offerings stated that Racanelli has 

been “recognized as one of the region’s leading providers of preconstruction planning, project 

management, design/build, and general contracting services.”   

109. The Offering Memoranda further stated that “[s]ince its founding, Racanelli has 

been responsible for building and renovation across a broad range and variety of market 

segments, completing projects that include corporate headquarters, industrial complexes, 

hospitals, assisted living facilities, university and college facilities, retail stores, hotels, 

restaurants, houses of worship, self-storage complexes, condominiums and townhouses.”  

110. An Eastern Mirage marketing brochure given to investors stated that the (Xia-

owned) development team has “decades of experience from over one hundred successful major 

projects.”  An Eastern Emerald brochure also stated that FFG, the developer of the Eastern 

Mirage project, has “nearly 20 years of experience in real estate development in the eastern 

United States” and that it was the winner of several New York real estate awards for green and 

intelligent building development practices. 

111. Racanelli was also touted in an Eastern Mirage marketing brochure as having 

been founded “60 years” ago.  Likewise, the Offering Memorandum for the EMMCO TOWER 

offering and the EMMCO Business Plan provided to investors to submit to USCIS stated that 

Racanelli was founded “over six decades ago.”  

112. The Business Plans for EMMCO NQMC, EMMCO TOWER, EEGH, and EEGH 

II described Racanelli as having been founded “decades ago.”  

113. These representations were false.  In fact, Racanelli was incorporated in 2011, and 

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it appears that Xia took the Racanelli name from a well-known construction firm and copied -  

almost word for word - the description in the Offering Memoranda directly from the website of 

an established company, the Original Racanelli.   

114. In April 2015, the Original Racanelli—which unlike Xia’s Racanelli did have six 

decades of construction experience—sued Xia and Racanelli, alleging that Xia “improperly 

assumed, utilized, displayed, and disseminated” the Original Racanelli’s protected trade name.  

In December 2015, the parties settled the trademark litigation and Xia agreed to “fully and 

completely refrain from any and all use of the name Racanelli in any capacity whatsoever,” 

although through a carve-out Xia was permitted to use the name in connection with the Projects. 

115. In December 2015, Perini was incorporated to replace Racanelli as the general 

contractor.  (The name bears a similarity to Tutor Perini Corp. – another well-known 

construction company unaffiliated with Xia).  However, Perini consisted of the same individuals 

who worked under the Racanelli name, and investors were never told that the general contractor 

had changed.  From January 2016 through October 2017, the Defendants continued to provide 

EEGH II investors with Offering Memoranda that cited Racanelli.   

116. The Defendants also failed to disclose to investors that he controlled Racanelli 

and Perini, the purported general contractors for the projects.  The Offering Memoranda did not 

disclose an affiliation between Racanelli and Xia.  On the contrary, Racanelli is falsely described 

as an independent company.  

117. Although Racanelli and Perini had Xia Entity Employee A as a nominal person in 

charge, this person received only about $87,000 through Racanelli and $186,000 through FFG’s 

payroll firm in compensation for over ten years of work.  In fact, Xia controlled both Racanelli 

and Perini and was himself the de facto general contractor.  Indeed, in a February 18, 2014 email 

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regarding a construction contract between a third party and Racanelli, Xia Entity Employee A 

asked Xia if she should “ask Julia to sign for [Xia].”  

118. Although Defendants concealed Xia’s control of Racanelli and Perini from 

investors, in numerous court filings as well as a bank signature card, Xia represented himself as 

the President of Racanelli and the Manager of Perini.  See Exhibit G (excerpts from court filings 

and bank signature cards). 

119. The Offering Memoranda also contained material misrepresentations and 

omissions of material fact regarding Xia’s construction experience and expertise.  Each Offering 

Memorandum for both projects stated that “Mr. Xia is a New York City real estate developer and 

President of the General Partner.  Mr. Xia has been active for ten years in land acquisition, 

commercial and residential development, marketing research, value-added strategies, financing, 

property management and leasing, and other related activities.  His company, Fleet Financial 

Group, Inc. specializes in ‘green’ projects[.]” 

120. The only specific project of Xia’s that is mentioned in the Offering Memoranda, 

however, was “Shangri-La Towers,” described as a “mixed-use condominium” development.  

The Shangri-La building was actually Xia’s first construction project.  With only this limited 

background in construction prior to embarking on the Eastern Mirage Project, Xia was ill-

equipped to handle two projects of the scope and magnitude of the Eastern Mirage and Eastern 

Emerald Projects, as he well knew.   

121. The insufficient capacity of Xia and his team to complete the large-scale 

construction projects is apparent from payroll records.  Although Xia created nearly a dozen 

entities (see supra paragraphs 31-48) that received investor funds, all of his companies shared 

the same personnel and were all paid through the same payroll firm.  Notably, before 2017, only 

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five people, including Xia and Yue, received payments through the payroll firm.  

122. Current photographs of the Eastern Mirage Project show the building to be empty 

and still under construction.  And although a Brownfield remediation (addressing contamination 

from the former occupant of the land) was completed in 2015 at the Eastern Emerald Project site, 

it is currently still only a largely vacant dirt hole surrounded by a concrete wall. 

123. The Eastern Emerald Project was issued at least 41 violations by the New York 

City Department of Buildings (“NYCDOB”), 31 of which were for hazardous conditions.  

Numerous stop-work orders have been issued by the NYCDOB, and there is currently a stop-

work order in place. 

124. On January 4, 2019, workers at the Eastern Emerald site—in violation of a stop-

work order—were engaged in excavation and caused a support wall along Northern Boulevard to 

collapse.  According to a NYCDOB report, the activity constituted “illegal work” and “led to the 

collapse of the sidewalk, half the width of Northern Boulevard, and the loss of gas, water, 

electrical, and telecommunication services.”  The Report stated that Xia was interviewed and 

“was evasive and unclear as to who was supervising and directing field operations prior to the 

collapse,” and that Xia, among others, “failed to act in a reasonable and responsible manner.”  

125. Xia and his entities face significant financial exposure from pending litigation 

involving ConEdison, which filed a damages lawsuit against EEG, FFG, Perini, Racanelli and 

the City of New York.  The City of New York subsequently filed a Cross-Claim against EEG, 

FFG, Perini, Racanelli and Shangri-La Green. 

D. Defendants Misrepresented the Affiliation With Westin 

126. The Eastern Mirage marketing materials represented that the hotel portion of the 

project would be a Westin-branded hotel.  Specifically, the marketing materials were 

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prominently titled: “FNYMRC The New York Westin Project” and claimed that the hotel would 

be a Westin Element hotel.   

127. The marketing script approved by Xia in 2014 described the Eastern Mirage 

Project as the “Eastern Mirage/Westin Hotel.”  

128. The EMMCO Tower Offering Memorandum also stated that the Eastern Mirage 

Tower “will encompass the development of the Westin Element Hotel & Condo Apartment 

building.”   

129. Similarly, the marketing materials for the Eastern Emerald Project claimed that 

Eastern Emerald would contain a Westin Hotel.  

130. These representations about sponsorship or affiliation with Westin were false.  

Although Xia received a noncommittal “letter of interest” in 2014, no deal with Westin was ever 

reached and the letter provided no basis for the Defendants to claim that they had a deal.  

Defendants knew, or were reckless in not knowing, at the time they chose to prominently brand 

their projects as Westin hotel projects, that they had no reasonable basis to make such 

representations.      

131. A reasonable investor would regard the affiliation with a major hotel chain as 

material.  Indeed, Xia received WeChat messages from investors and their agents in 2018 in 

which they referred to the Eastern Mirage Project as the “Westin project,” yet Defendants never 

disclosed that there was no Westin deal. 

E. Defendants Misrepresented the Size of the Eastern Emerald Project 

132. The EEGH II Offering Memorandum stated that the “original building” described 

in the EEGH Offering Memorandum was 643,180 square feet, and, as a result of the “expansion” 

described in the EEGH II Offering Memorandum, the square footage would increase to 

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1,199,578 square feet.  Both representations were false when made, as Defendants well knew.  

The size of the square footage and the expansion of the original project gave the impression that 

the project was on track to being successful.  A reasonable investor would find this material. 

133. The Defendants knew that both square footage numbers were false.  The 2014 

“Plan/Work Application” that Xia signed and which was filed with the New York City 

Department of Buildings only sought permission for a structure of 350,186 feet.  The 

Defendants’ square footage estimate in the EEGH II Offering Memorandum was three times 

what they had been authorized to build.  Xia never sought or received permission to build 

structures anywhere near the size of the buildings described in the Offering Memorandum.   

F. Defendants Failed to Disclose the Highly Material Rental Agreements 

134. The Offering Memoranda stated that there were “no material conflicts of interest 

between the General Partner and its affiliates on the one hand and the Partnership on the other 

hand.”  The Offering Memoranda further stated that the “General Partner is accountable to the 

Partnership as a fiduciary and consequently must exercise good faith and integrity in handling 

the Partnership’s affairs.”  As the President, CEO, and Managing Member of the General 

Partner, Xia had an obligation to exercise good faith and integrity in handling the Partnership’s 

affairs. 

135. The Loan Agreements entered into by each of the limited partnerships required 

the borrowers—FFG, EEG and LaGuardia—to repay the investor funded loans.  But, the ability 

of FFG and LaGuardia to repay the loans was seriously impaired by undisclosed side agreements 

created by Xia.  These side agreements, which are material omissions, are another example of the 

self-dealing that is a hallmark of Xia’s financial arrangements. 

136. On January 1, 2008 (two years before the Eastern Mirage Project’s EMMCO 

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offering), X&Y leased the Union Street property to FFG, Eastern Mirage’s developer, under a 

99-year land lease requiring annual rent in the amount of $2.5 million for the first three years, 

and $3.5 million for the next three years, with subsequent increases.  FFG, which has never made 

a payment and has been in default, currently owes unpaid rent to X&Y of at least $42.2 million 

under the terms of this lease agreement.  Yue signed the lease agreement on behalf of X&Y and 

Xia signed on behalf of FFG. 

137. On September 28, 2015, LaGuardia entered into a lease agreement with EEG that 

requires LaGuardia to pay EEG an annual rent of $3.5 million, which increased to $4.5 million.  

LaGuardia, which has never made a payment, currently owes unpaid rent of at least $16.5 

million to EEG under the terms of this lease agreement.  Xia signed the lease agreement on 

behalf of both EEG and LaGuardia. 

138. These agreements, which were never disclosed to investors, are highly material.  

In the event the Eastern Mirage and Eastern Emerald properties are sold, X&Y and EEG would 

have the right to enforce FFG’s and LaGuardia’s payment obligations, which significantly 

diminishes the amount they will have available to repay the investors.  In addition, given that 

both FFG and LaGuardia have been in default, X&Y and EEG have the right under their loan 

agreements at any time to foreclose and essentially bankrupt FFG and LaGuardia.  This is a 

significant risk to investors, who have no recourse against X&Y and EEG under the loan 

agreements.  Furthermore, these enormous, accrued debts will seriously impair FFG’s and 

LaGuardia’s ability to obtain the type of long–term financing that they represented would be 

obtained to repay the investors their capital contributions.   

139. Xia was on all sides of these secret agreements, which protected his interests to 

the detriment of the investors. 

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G. Xia Directed Funds Through Over 150 Accounts to Conceal his Fraud and to 

Benefit Himself 

140. Contrary to the Defendants’ duty to act “as a fiduciary,” Xia managed the $229 

million that flowed into bank accounts he controlled in a way to protect and benefit himself at 

the expense of the investors.  Xia created over 150 accounts in the names of various entities he 

owned or controlled (see supra paragraphs 31-48) and used these bank accounts to engage in 

numerous, multi-step transactions to commingle investor funds and to hide the actual source of 

payments.  Through hundreds of transactions that appear to have little or no legitimate business 

purpose, the investor funds were transferred into and out of over 150 accounts in what amounted 

to a shell game. 

141. There were continuous and significant fund transfers of investor funds in every 

conceivable direction for more than seven years, not only from the developer to the purported 

general contractors (Racanelli and Perini) and then to other entities owned and controlled by Xia, 

but also between and among the other entities owned and controlled by Xia, and then cycled 

back to the developers and Racanelli and Perini.  To summarize, from 2012 through January 

2019, over $127 million in investors’ funds was transferred from the developers to the purported 

general contractors, and at least $85.9 million was then transferred to other entities that Xia 

owned and controlled.   Of the $85.9 million, approximately $32.7 million was cycled back 

upstream to bank accounts of the developers and approximately $1.14 million was then cycled 

back to bank accounts of the general contractor. 

142. In addition, of the $85.9 million transferred to Xia Entities, approximately $43.6 

million were not supported by any invoices.  An invoice from a Xia entity to the payors 

(Racanelli/Perini) would be expected to show what services were provided, the persons 

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providing such services, and the payment for each service.  The absence of any invoices for 

$43.6 million in transfers suggests the transfers were unfounded or had no legitimate business 

purpose.  Moreover, the invoices that Xia provided for Amazon River, FFG, JiQing 

Development, Manekineko Group, Samuel Development, Shangri-La Green, Shangri-La 9F, and 

X&Y to ostensibly support approximately $32.2 million in payments of investor funds to those 

entities do not appear legitimate.  Notably, these Xia invoices contained lengthy lists of tasks 

performed and a single amount at the bottom, with no breakdown of how much was billed for 

each task and who performed these tasks.  The Xia invoices were ostensibly submitted by seven 

of his entities and were in large round-dollar amounts that did not vary from month to month.  

These Xia invoices also were strikingly different in form and substance from the many legitimate 

third-party invoices submitted by outside vendors to Racanelli/Perini.  

143. The multiple transfers between and among the accounts do not appear to have had 

legitimate business purposes. 

H. Defendants Concealed Material Information From the Limited Partners 
 

144. To hide their scheme from the investors, Defendants failed to disclose to them 

critical information that might have revealed Defendants’ illegal conduct, even though 

Defendants had an affirmative obligation as fiduciaries to do so. 

145. Defendants failed to disclose to investors in the later Eastern Emerald offerings 

that they had made numerous misrepresentations and omissions to investors in earlier Eastern 

Mirage offerings.  During 2015, 2016 and 2017, the EEGH and EEGH II offerings raised $148 

million from investors—nearly three times the amount raised in the earlier Eastern Mirage 

offerings.  Defendants did not disclose to these later investors that Xia had misappropriated 

Eastern Mirage investor funds and that the Defendants had also made other false and misleading 

statements.  Given that the Defendants touted the supposed success of the Eastern Mirage 

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offerings to promote the Eastern Emerald offerings, the fact that the earlier offerings were 

marred by their numerous false and misleading statements and misappropriations would have 

been highly material to investors in 2015, 2016 and 2017.  The Defendants nevertheless 

concealed this material information from the Eastern Emerald investors.  

146. In addition, the Offering Memoranda stated that “the Partnership will send to each 

Limited Partner, generally within 90 days after the end of each fiscal year of the Partnership, an 

accounting report including a balance sheet and statements of income, changes in Partner’s 

equity and cash flows, prepared in accordance with Generally Accepted Accounting Principles, 

plus a schedule and summary description of the investments owned by the Partnership at year-

end and a statement for each LP of its capital account.”  Defendants did not provide investors 

with the reports required by the Offering Memoranda as described above. 

I. Yue Received At Least $9.7 Million in Ill-Gotten Gains 

147. Yue received a total of more than $9.7 million in ill-gotten gains for which she 

has no legitimate claim.  From 2012 through January 2019, Yue received a total of $4.1 million 

from Xia Entities, including Racanelli, sourced by investor funds, and she also received $5.6 

million between April and May 2021 from a line of credit that was collateralized with investor 

funds (see supra paragraph 81). 

148. Although Yue was an authorized signatory on many bank accounts of the Xia 

Entities, she acted primarily at Xia’s direction. 

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a) 

(Both Defendants) 
 

149. The SEC re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 148. 

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150. Defendants, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or the mails, (1) knowingly or recklessly have employed one or more 

devices, schemes or artifices to defraud, (2) knowingly, recklessly, or negligently have obtained 

money or property by means of one or more untrue statements of a material fact or omissions of 

a material fact necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading, and/or (3) knowingly, recklessly, or negligently 

have engaged in one or more transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon the purchaser. 

151. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. 

§ 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

(Both Defendants) 
 

152. The SEC re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 148. 

153. Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly have (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one 

or more untrue statements of a material fact or omitted to state one or more material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of 

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business which operated or would operate as a fraud or deceit upon other persons. 

154. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

THIRD CLAIM FOR RELIEF 
Unjust Enrichment 
(Relief Defendant) 

 
155. The SEC re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 148. 

156. Yue received a total of at least $9.7 million in ill-gotten gains derived from the 

Defendants’ above-referenced violations of the securities laws.  

157. Yue has no legitimate claim to these ill-gotten gains.  

158. Yue obtained the funds under circumstances in which it is not just, equitable, or 

conscionable for her to retain the funds.  

159. Yue has therefore been unjustly enriched. 

PRAYER FOR RELIEF 

 WHEREFORE, the SEC respectfully requests that the Court enter: 

I. 

A Final Judgment permanently restraining and enjoining Defendants and each of their 

respective agents, servants, employees, attorneys and other persons in active concert or 

participation with each of them who receive actual notice of the injunction by personal service or 

otherwise, from any ongoing and future violations of Securities Act Section 17(a) [15 U.S.C. § 

77q(a)],  and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5]; 

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 40 

II. 

An Order directing the Defendants and Relief Defendant, and each of their financial and 

brokerage institutions, agents, servants, employees attorneys-in-fact, and those persons in active 

concert or participation with them, including the Xia Entities, who receive actual notice of such 

Order by personal service, facsimile service, or otherwise, to hold and retain within their control, 

and otherwise prevent, any withdrawal, transfer, pledge, encumbrance, assignment, dissipation, 

concealment or other disposal of any assets, funds, or other property (including money, real or 

personal property, securities, commodities, choses in action or other property of any kind 

whatsoever) of, held by, or under the control of the Defendants and Relief Defendant, whether 

held in their names or for their direct or indirect beneficial interest wherever situated; 

III. 

 An Order directing the Defendants and Relief Defendant to file with this Court and serve 

upon the Commission, within three (3) business days, or within such extension of time as the 

Commission staff agrees to, sworn accountings, signed by Xia as to the Defendants and signed 

by Yue in her capacity of Relief Defendant, under penalty of perjury, setting forth: 

 (1) All assets, liabilities and property currently held, directly or indirectly, by 

or for the benefit of each such Defendant and Relief Defendant, including, without 

limitation, bank accounts, brokerage accounts, investments, business interests, loans, 

lines of credit, and real and personal property wherever situated, describing each asset 

and liability, its current location and amount; 

 (2) All money, property, assets and income received by Defendants or Relief 

Defendant for their direct or indirect benefit, at any time from January 1, 2010, through 

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 41 

the date of such accounting, describing the source, amount, disposition and current 

location of each of the items listed; 

 (3) The names and last known addresses of all bailees, debtors, and other 

persons and entities that currently are holding the assets, funds or property of such 

Defendants and Relief Defendant; and 

 (4) All assets, funds, securities, and real or personal property received by such 

Defendants and Relief Defendant, or any other person controlled by them, from persons 

who provided money to such Defendants and Relief Defendant in connection with the 

offer, purchase or sale of securities, from January 1, 2010 through the date of such 

accounting, and the disposition of such assets, funds, securities, real or personal property; 

IV. 

An Order providing that the Commission may take expedited discovery; 

V. 

 An Order appointing a Monitor; 

VI. 

A Final Judgment ordering Defendants and Relief Defendant to disgorge all ill-gotten 

gains and/or unjust enrichment received directly or indirectly, with pre-judgment interest 

thereon, as a result of the alleged violations, pursuant to Exchange Act Sections 21(d)(5) and 

21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)]; 

VII. 

A Final Judgment ordering Defendants to pay civil money penalties under Securities Act 

Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; 

and 

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VIII. 

Granting any other and further relief this Court may deem just and proper. 

 
JURY DEMAND 

 
            Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands trial by 

jury in this action of all issues so triable.  

 

 
Dated: New York, New York 

September 27, 2021 
 

____________________________________   
RICHARD R. BEST 
REGIONAL DIRECTOR  
Lara M. Mehraban 
Judith Weinstock 
Kevin P. McGrath 
David Stoelting 
Brenda Chang 
Kim Han 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place  
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0174 (Stoelting) 
[email protected] 
  

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RICHARD BEST Digitally signed by RICHARD BEST 
Date: 2021.09.27 07:21:44 -04'00'



Exhibits to Complaint 

SEC v. Richard Xia and Fleet New York Metropolitan Regional Center LLC (E.D.N.Y.) 

 

Exhibit A: Easter Mirage project photos . . . . . . 1 

Exhibit B: Easter Emerald Project photos  . . . . . 2 

Exhibit C: Bank Accounts and Authorized Signatories . . . . 3 

Exhibit D: Eastern Mirage Funds Used to Purchase Eastern Emerald Land . . 7 

Exhibit E: Eastern Mirage Funds Used to Pay Off Lawrence Street Mortgage . 9 

Exhibit F: Eastern Emerald Project Funds Used for One Madison Park  . . 10 

Exhibit G: Attestations by Xia of Affiliations with Racanelli and Perini . . 11 

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COMPLAINT EXHIBIT A
Eastern Mirage Project

42-31 Union St., Queens, NY, Sept. 14, 2021

1

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COMPLAINT EXHIBIT B
Eastern Emerald Project

112-21 Northern Blvd., Queens, NY, Sept. 14, 2021

2

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3

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4

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5

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6

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FUNDS FROM INVESTORS

EMMCO NQMC LP 1282
Bal. June 19, 2013: $14,783,646

EMMCO NQMC LP 0896
Bal. June 19, 2013: $19,018

Fleet Financial 1183
Bal. June 25, 2013: $99,915

Racanelli 1555
Bal. June 25, 2013: $63,293

Eastern Emerald Group 3379
Acct. Opened June 26, 2013: $0

6/27/2013 $1,700,000 Transfer:
Rothkrug, Rothkrug & Spector, LLP  

as Escrow Agent
attorney for seller of Eastern Emerald property

Total: $2,000,0006/27 $2,000,000

Total: $2,000,0006/27 $2,000,000

Total: $1,700,000
6/27 $490,000
6/27 $420,000
6/27 $490,000
6/27 $300,000

Total: $1,700,0006/27 $1,700,000

COMPLAINT EXHIBIT D
Eastern Mirage Project Funds Used to Purchase 

Eastern Emerald Project Land
JUNE 2013 TRANSFERS

7

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COMPLAINT EXHIBIT D
Eastern Mirage Project Funds Used to Purchase 

Eastern Emerald Project Land 
DECEMBER 2013 TRANSFERS

8

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FUNDS FROM INVESTORS

EMMCO LP 3048
Beg. Bal. March 2012:$1,200,752

Fleet Financial 0375
Bal. March 29, 2012: $11,130

Racanelli 1555
Beg. Bal. April 1, 2012: $47,559

JiQing Development 0300
Beg. Bal. April 1, 2012: $1,042

4/9/2012 $819,810 Transfer:
Chinatown Federal Savings Bank 

memo: 
“Loan payoff #18 71-8 57-35 Lawrence”

Total: $1,160,000
3/30 $330,000
4/4 $330,000
4/6 $500,000

Total: $983,000
4/2 $280,000
4/4 $323,000
4/6 $380,000

Total: $819,8104/6 $819,810

COMPLAINT EXHIBIT E
Eastern Mirage Project Funds Used to Pay Off 

57-35 Lawrence Street Mortgage
MARCH/APRIL 2012 TRANSFERS

9

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COMPLAINT EXHIBIT F
Eastern Emerald Project Funds

Used for One Madison Park
JULY 2015 TRANSFERS

FUNDS FROM INVESTORS

EEGH LP 5168
Beg. Bal. July 1, 2015: $18,365,308

EEGH LP 6166
Beg. Bal. July 1, 2015: $0

Total: $3,000,0007/1 $3,000,000

Total: $3,000,0007/1 $3,000,000

Eastern Emerald Group 3379
Beg. Bal. July 1, 2015: $263,599

Racanelli 5283
Beg. Bal. July 1, 2015: $9,800

Amazon River LLC 6158
Acct. Opened July 2, 2015: $0

7/7/2015 $2,325,000 Transfer:
Michael, Levitt & Rubenstein LLC 

as Escrow Agent 
(for “One Madison Park 43A”)

Total: $2,330,0007/6 $2,330,000

Total: $2,328,0007/7 $2,328,000

10

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11

COMPLAINT EXHIBIT G

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS

-------------------------------------------------------------------------
RACANELLI CONSTRUCTION GROUP, INC.,

-against-
EASLE SERVICE CORP. and SCOTT EHRLER

VERIFIED COMPLAINT

RICHARD XIA, being duly sworn, deposes and states:

1. I am the President of Racanelli Construction 
Group, Inc. (01-10-2013)

REPLY TO COUNTERCLAIMS

RICHARD XIA, being duly sworn, deposes and states:

1. I am the President of Racanelli Construction 
Group, Inc.

AFFIDAVIT OF RICHARD XIA IN SUPPORT OF
PLAINTIFF’S ORDER TO SHOW CAUSE

RICHARD XIA, being duly sworn, deposes and says:

1. I am the president of the plaintiff, Racanelli 
Construction Group Inc.

AFFIDAVIT OF RICHARD XIA

RICHARD XIA, being duly sworn, deposes and says:

1. I am the president of the plaintiff, Racanelli 
Construction Group Inc.

AFFIDAVIT IN SUPPORT

RICHARD XIA, being duly sworn, deposes and states 
under the penalties of perjury, as follows:

1. I am the President of Plaintiff Racanelli 
Construction Group, Inc.

12

COMPLAINT EXHIBIT G

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

----------------------------------------------------------------
RACANELLI CONSTRUCTION CO., INC.,

- against -
RACANELLI CONSTRUCTION GROUP INC., and RICHARD XIA

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS

----------------------------------------------------------------
VLADIMIR DEVDARIANI

- against -
X & Y DEVELOPMENT GROUP, LLC and PERINI GROUP, INC.

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS

----------------------------------------------------------------
X-TREME CONCRETE INC.,

- against –
RACANELLI CONSTRUCTION GROUP, INC., X&Y DEVELOPMENT GROUP, LLC

and “JOHN DOE NO. 1” through “JOHN DOE NO. 5”

VERIFIED ANSWER

RICHARD Y. XIA, duly sworn, deposes and says to be 
true and correct, under the penalties of perjury, under the 
laws of the United States of America, the following:

I am an individual Defendant and the President 
of Defendant Racanelli Construction Group, Inc.

AFFIDAVIT OF SEARCH CONDUCTED

RICHARD XIA, being duly sworn, deposes and says:

1. I am the manager of Defendant PERINI GROUP, INC.

AFFIDAVIT OF RICHARD XIA IN OPPOSITION TO 
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

RICHARD XIA, being duly sworn, deposes and says:

2. In addition, I am also a former member 
of Racanelli Construction Group, Inc.

13

COMPLAINT EXHIBIT G

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