SEC v. JUSTIN MOONGYU LEE, No. 2:14-cv-06865, Central District of California (Nov. 20, 2015)

 
1 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 74385 / February 26, 2015 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-16408
       
      :  
 :  
 :   
In the Matter of : ORDER INSTITUTING ADMINISTRATIVE 
      : PROCEEDINGS PURSUANT TO RULE 
          THOMAS EDWARD KENT, : 102(e) OF THE COMMISSION’S RULES OF 
      : PRACTICE, MAKING FINDINGS, AND 
           Respondent.   : IMPOSING REMEDIAL SANCTIONS 
      :  
      :  
____________________________________ :     
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative proceedings be, and hereby are, instituted against Thomas 
Edward Kent (“Respondent” or “Kent”) pursuant to Rules 102(e)(2) and 102(e)(3)(i) of the 
Commission’s Rules of Practice.
1
   
 
                                                 
1
 Rule 102(e)(2) provides, in relevant part, that: 
 
 Any attorney who has been suspended or disbarred by a court of the United States or of 
any State. . . shall be forthwith suspended from appearing or practicing before the 
Commission. . . .  
 
Rule 102(e)(3)(i) provides, in relevant part, that: 
 
 The Commission, with due regard to the public interest and without preliminary hearing, 
may, by order, . . . suspend from appearing or practicing before it any attorney . . . who 
has been by name . . . permanently enjoined by any court of competent jurisdiction, by 
reason of his or her misconduct in an action brought by the Commission, from violating 
or aiding and abetting the violation of any provision of the Federal securities laws or of 
the rules and regulations thereunder. 

 
2 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over him and the subject matter of these 
proceedings, and the findings contained in Section III.1 and 4 below, which are admitted, 
Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to 
Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial 
Sanctions (“Order”), as set forth below.   
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that:  
 
1. Kent, age 56, was at all relevant times an attorney licensed to practice in the 
State of California.  Kent was disbarred by the State of California effective August 30, 2014.  At all 
relevant times, Kent was employed at the Law Offices of Lee & Kent in Los Angeles, California.  
He acted as legal counsel for Nexland, Inc., dba Nexland Investment Group (“Nexland”) from at 
least some time in 2010 to August 2011.  He also served as the executive vice president and general 
counsel of Nexsun Ethanol, LLC (“Nexsun”), and served on its Board of Directors from about 2008 
to 2009.  Kent resides in Granada Hills, California. 
 
2. Nexland is a California Corporation which was at all relevant times 
headquartered in Los Angeles, California.  Nexland is the managing member of three California 
limited liability companies which purported to offer investments eligible under the United States 
Government’s EB-5 visa program, which is administered by the United States Citizenship and 
Immigration Service (“USCIS”), and provides immigrant investors conditional permanent 
residency status for a two-year period, followed by permanent residency if the required program 
conditions, including creation of full-time jobs, are met.  Nexland was incorporated by Kent at the 
direction of Justin Moongyu Lee (“J. Lee”), its CEO and president, and a principal of Lee & Kent, 
and Kent acted as Nexland’s legal counsel from 2010 to August 2011.  
 
3. Nexsun is a Kansas limited liability company which was at all relevant 
times headquartered in Los Angeles, California.  Nexsun was created to purportedly operate an 
ethanol plant in Kansas, which plant was the purported EB-5 eligible investment.  At all relevant 
times, Kent was executive vice president and general counsel of Nexsun.  Kent was also on the 
board of directors of Nexsun in or about 2008 through 2009. 
 
4. On October 15, 2014, a judgment was entered against Kent, permanently 
enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in the civil action entitled 

 
3 
Securities and Exchange Commission v. Justin Moongyu Lee, et al., Civil Action Number 2:14 -
CV-06865 RGK, in the United States District Court for the Central District of California.   
 
5. The Commission’s complaint alleged, among other things, that Kent 
participated in the fraudulent EB-5 scheme as follows.   
 
a. Under the EB-5 program, an immigrant who invests capital in a 
“commercial enterprise” in the United States may petition USCIS and receive conditional 
permanent residency status for a two-year period.  The immigrant must invest at least $500,000 in 
a “Targeted Employment Area” (“TEA”) and thereby create at least ten full-time jobs for United 
States workers.  If the immigrant satisfies these and other conditions within the two-year period, 
the immigrant may then petition the USCIS for permanent residency.  To facilitate investment and 
job creation within a TEA, the EB-5 program allows entities to apply to USCIS to become 
approved “regional centers.”  To become a regional center, the entity must demonstrate, with 
supporting economic and statistical studies, how it will promote economic growth, including job 
creation.   
 
b. First, Kent and J. Lee applied to USCIS in 2006 on behalf of Kansas 
Biofuel Regional Center , LLC (“Kansas Biofuel”), an entity for which they had prepared the 
business plan, for designation as a “regional center.”  Kent was the vice president of Kansas 
Biofuel.  Among other representations, Kent and J. Lee claimed to USCIS that there would be 
“substantial economic benefit” to the area stemming from construction and operation of new 
ethanol plants by Nexsun, including “thousands” of new jobs.   
 
c. Second, after USCIS approved the designation of Kansas Biofuel as 
a regional center, Kent and J. Lee created various companies through which to raise monies from 
immigrant investors.  Kent reviewed all of the offering materials, and was thus aware of their 
content.  The Defendants, including Kent, then proceeded to raise millions of dollars from 
immigrant investors by representing to them that their monies would be used to construct an 
ethanol plant in Kansas, and that this investment qualified the investors to obtain residency, and 
ultimately citizenship, in the United States.  
 
d. In fact, however, as Kent knew, the ethanol plant was never built.  
No jobs were created, and J. Lee and his wife, Rebecca Taewon Lee, misappropriated and misused 
most of the $11.5 million raised in the offerings.  These misuses of investor monies were neither 
permissible under the EB-5 program nor disclosed to investors.   
 
e. To conceal the fraudulent use of funds and failure to construct the 
promised ethanol plant and create the jobs contemplated by the EB-5 program, Kent and the Lees 
submitted various false documents to USCIS.  In particular, Kent wrote and signed cover letters for 
Form I-829 packages submitted to USCIS in 2010 and 2011 petitioning for removal of the 
conditions on specific investors’ residency in the United States, which packages claimed that the 
job creation requirements of the EB-5 program had been met.  Kent reviewed the packages before 
they were submitted to the USCIS.  Those packages included Forms I-9 purporting to identify 

 
4 
individual employees to be hired by Nexsun, even though no Nexsun plant had been built, and 
Nexsun employee lists.  The lists were misleading because, among other things, they listed Kent’s 
wife as a full-time Nexsun employee without disclosing that she lived in California, rather than in 
the Kansas TEA, and because they described her position as “Accountant,” when at most she 
performed clerical functions for Nexsun.  Additionally, in response to USCIS Requests for 
Additional Evidence in support of specific I-829 petitions (“RFEs”), Kent falsely represented that 
either twenty-one or twenty-six “full time direct jobs” were created by Nexsun as of the date of the 
investor’s I-829 petition, that “construction of Nexsun’s refinery is substantially underway and 
moving towards successful completion,” and that the investor petitioner “currently expects that 
construction will be complete and commercial operations will commence by the first quarter of 
2012,” when he knew construction had in fact ceased in mid-2008. 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanction agreed to in Respondent Kent’s Offer. 
 
 Accordingly, it is hereby ORDERED, effective immediately, that: 
 
 Kent is suspended from appearing or practicing before the Commission as an attorney.   
 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 
 

1 

 UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 74385 / February 26, 2015 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-16408

       

      :  

 :  

 :   

In the Matter of : ORDER INSTITUTING ADMINISTRATIVE 

      : PROCEEDINGS PURSUANT TO RULE 

          THOMAS EDWARD KENT, : 102(e) OF THE COMMISSION’S RULES OF 

      : PRACTICE, MAKING FINDINGS, AND 

           Respondent.   : IMPOSING REMEDIAL SANCTIONS 

      :  

      :  

____________________________________ :     

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative proceedings be, and hereby are, instituted against Thomas 

Edward Kent (“Respondent” or “Kent”) pursuant to Rules 102(e)(2) and 102(e)(3)(i) of the 

Commission’s Rules of Practice.1   

 

                                                 
1 Rule 102(e)(2) provides, in relevant part, that: 

 

 Any attorney who has been suspended or disbarred by a court of the United States or of 

any State. . . shall be forthwith suspended from appearing or practicing before the 

Commission. . . .  

 

Rule 102(e)(3)(i) provides, in relevant part, that: 

 

 The Commission, with due regard to the public interest and without preliminary hearing, 

may, by order, . . . suspend from appearing or practicing before it any attorney . . . who 

has been by name . . . permanently enjoined by any court of competent jurisdiction, by 

reason of his or her misconduct in an action brought by the Commission, from violating 

or aiding and abetting the violation of any provision of the Federal securities laws or of 

the rules and regulations thereunder. 



 

2 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over him and the subject matter of these 

proceedings, and the findings contained in Section III.1 and 4 below, which are admitted, 

Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to 

Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial 

Sanctions (“Order”), as set forth below.   

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds that:  

 

1. Kent, age 56, was at all relevant times an attorney licensed to practice in the 

State of California.  Kent was disbarred by the State of California effective August 30, 2014.  At all 

relevant times, Kent was employed at the Law Offices of Lee & Kent in Los Angeles, California.  

He acted as legal counsel for Nexland, Inc., dba Nexland Investment Group (“Nexland”) from at 

least some time in 2010 to August 2011.  He also served as the executive vice president and general 

counsel of Nexsun Ethanol, LLC (“Nexsun”), and served on its Board of Directors from about 2008 

to 2009.  Kent resides in Granada Hills, California. 

 

2. Nexland is a California Corporation which was at all relevant times 

headquartered in Los Angeles, California.  Nexland is the managing member of three California 

limited liability companies which purported to offer investments eligible under the United States 

Government’s EB-5 visa program, which is administered by the United States Citizenship and 

Immigration Service (“USCIS”), and provides immigrant investors conditional permanent 

residency status for a two-year period, followed by permanent residency if the required program 

conditions, including creation of full-time jobs, are met.  Nexland was incorporated by Kent at the 

direction of Justin Moongyu Lee (“J. Lee”), its CEO and president, and a principal of Lee & Kent, 

and Kent acted as Nexland’s legal counsel from 2010 to August 2011.  

 

3. Nexsun is a Kansas limited liability company which was at all relevant 

times headquartered in Los Angeles, California.  Nexsun was created to purportedly operate an 

ethanol plant in Kansas, which plant was the purported EB-5 eligible investment.  At all relevant 

times, Kent was executive vice president and general counsel of Nexsun.  Kent was also on the 

board of directors of Nexsun in or about 2008 through 2009. 

 

4. On October 15, 2014, a judgment was entered against Kent, permanently 

enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 

10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in the civil action entitled 



 

3 

Securities and Exchange Commission v. Justin Moongyu Lee, et al., Civil Action Number 2:14 -

CV-06865 RGK, in the United States District Court for the Central District of California.   

 

5. The Commission’s complaint alleged, among other things, that Kent 

participated in the fraudulent EB-5 scheme as follows.   

 

a. Under the EB-5 program, an immigrant who invests capital in a 

“commercial enterprise” in the United States may petition USCIS and receive conditional 

permanent residency status for a two-year period.  The immigrant must invest at least $500,000 in 

a “Targeted Employment Area” (“TEA”) and thereby create at least ten full-time jobs for United 

States workers.  If the immigrant satisfies these and other conditions within the two-year period, 

the immigrant may then petition the USCIS for permanent residency.  To facilitate investment and 

job creation within a TEA, the EB-5 program allows entities to apply to USCIS to become 

approved “regional centers.”  To become a regional center, the entity must demonstrate, with 

supporting economic and statistical studies, how it will promote economic growth, including job 

creation.   

 

b. First, Kent and J. Lee applied to USCIS in 2006 on behalf of Kansas 

Biofuel Regional Center , LLC (“Kansas Biofuel”), an entity for which they had prepared the 

business plan, for designation as a “regional center.”  Kent was the vice president of Kansas 

Biofuel.  Among other representations, Kent and J. Lee claimed to USCIS that there would be 

“substantial economic benefit” to the area stemming from construction and operation of new 

ethanol plants by Nexsun, including “thousands” of new jobs.   

 

c. Second, after USCIS approved the designation of Kansas Biofuel as 

a regional center, Kent and J. Lee created various companies through which to raise monies from 

immigrant investors.  Kent reviewed all of the offering materials, and was thus aware of their 

content.  The Defendants, including Kent, then proceeded to raise millions of dollars from 

immigrant investors by representing to them that their monies would be used to construct an 

ethanol plant in Kansas, and that this investment qualified the investors to obtain residency, and 

ultimately citizenship, in the United States.  

 

d. In fact, however, as Kent knew, the ethanol plant was never built.  

No jobs were created, and J. Lee and his wife, Rebecca Taewon Lee, misappropriated and misused 

most of the $11.5 million raised in the offerings.  These misuses of investor monies were neither 

permissible under the EB-5 program nor disclosed to investors.   

 

e. To conceal the fraudulent use of funds and failure to construct the 

promised ethanol plant and create the jobs contemplated by the EB-5 program, Kent and the Lees 

submitted various false documents to USCIS.  In particular, Kent wrote and signed cover letters for 

Form I-829 packages submitted to USCIS in 2010 and 2011 petitioning for removal of the 

conditions on specific investors’ residency in the United States, which packages claimed that the 

job creation requirements of the EB-5 program had been met.  Kent reviewed the packages before 

they were submitted to the USCIS.  Those packages included Forms I-9 purporting to identify 



 

4 

individual employees to be hired by Nexsun, even though no Nexsun plant had been built, and 

Nexsun employee lists.  The lists were misleading because, among other things, they listed Kent’s 

wife as a full-time Nexsun employee without disclosing that she lived in California, rather than in 

the Kansas TEA, and because they described her position as “Accountant,” when at most she 

performed clerical functions for Nexsun.  Additionally, in response to USCIS Requests for 

Additional Evidence in support of specific I-829 petitions (“RFEs”), Kent falsely represented that 

either twenty-one or twenty-six “full time direct jobs” were created by Nexsun as of the date of the 

investor’s I-829 petition, that “construction of Nexsun’s refinery is substantially underway and 

moving towards successful completion,” and that the investor petitioner “currently expects that 

construction will be complete and commercial operations will commence by the first quarter of 

2012,” when he knew construction had in fact ceased in mid-2008. 

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanction agreed to in Respondent Kent’s Offer. 

 

 Accordingly, it is hereby ORDERED, effective immediately, that: 

 

 Kent is suspended from appearing or practicing before the Commission as an attorney.   

 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary