Thread: Troubled McAllen investment firm USA Now has assets frozen, faces SEC lawsuit

Troubled McAllen investment firm USA Now has assets frozen, faces SEC lawsuit


October 2, 2013 10:53 am
Jared Taylor | The Monitor

McALLEN — A federal judge froze the assets and issued a temporary restraining order against local company that federal investigators have said used foreign investors' money in a Ponzi Scheme.

The federal judge's order came Monday against USA Now, a McAllen-based foreign investment firm that was served with a lawsuit from the Securities and Exchange Commission that afternoon.

The lawsuit came more than two months after FBI agents raided USA Now's McAllen offices. The firm solicits foreign investments from people seeking immigration status in the United States under the EB-5 program.

EB-5 investments allow people to place $500,000 in escrow with a so-called EB-5 Regional Center like USA Now in order to pursue a fast-track toward obtaining a green card for themselves and their families.

But none of USA Now's foreign investors have received even conditional approval for a green card that would allow them to live in the United States, the SEC says in the lawsuit.

USA Now has operated as an EB-5 regional center since 2010, purporting to have ambitions to land $150 million in investments, director Marco Ramirez told The Monitor in 2011.

During the July raids of Ramirez's home and USA Now's offices at North 10th Street and Kerria Avenue, the government seized documents and some property, including vehicles purported to have been purchased using investor funds.

But USA Now had continued to have control over its investors' money. The SEC says Marco Ramirez and at least one other USA Now employee have made trips abroad since July soliciting new investors, the lawsuit states.

"We're going to go fight it," said USA Now's lawyer, Tony Canales, declining further comment.

http://www.themonitor.com/news/local...9bb30f31a.html

Feds: Ponzi scheme preyed on Mexican investors seeking visas



Monitor file photo
Marco Ramirez
Posted: Tuesday, July 30, 2013 10:20 pm

Jared Taylor | The Monitor

McALLEN — Federal authorities say a local company operated a Ponzi scheme under the guise of guiding wealthy Mexicans’ investments into local economic development projects that put them on the fast track to immigration status in the United States — only to use the money to buy luxury cars and pay off legal settlements.


FBI agents this month raided the McAllen offices of USA Now Regional Center and home of its owner and directors, Bebe and Marco Ramirez, saying the company took millions from wealthy Mexican investors seeking to escape that country’s drug violence and start anew north of the Rio Grande, but it then directed funds elsewhere without their clients’ discretion.

In all, five USA Now employees are named in the warrants as part of the FBI-led investigation into suspected wire fraud, money laundering and interstate or foreign transportation of stolen property, the warrant said.

No criminal charges have been filed against Bebe or Marco Ramirez, or any of their employees. The Monitor on Tuesday obtained the four search warrants and records detailing what agents recovered in two July 19 raids approved by U.S. Magistrate Judge Peter Ormsby.

FBI agents seized a Mercedes-Benz sedan, a Dodge Ram 3500 pickup truck, more than $29,000 in cash, reams of documents, a dozen firearms and other property owned by Bebe and Marco Ramirez, court records say.

Marco Ramirez guided inquiries about the case to his attorney, but said USA Now remains open, though the federal probe could “hurt our business.”

“Our license is in place and we’re active and doing great,” he said via telephone Tuesday evening.

‘PONZI SCHEME’

Agents dubbed Ramirez’s business a Ponzi scheme — a fraudulent investment where initial investors are paid returns by subsequent investors. The term gained notoriety after Charles Ponzi led such an investment fraud in 1920.

Perhaps the most prominent such scheme in recent history was that of Bernard Madoff, whose multibillion-dollar investment firm that was a sham led to a 150-year prison sentence and $17 billion in restitution ordered to be repaid.

Corpus Christi-based attorney Tony Canales, who has been hired by USA Now, said the FBI’s investigation is “wrong on the law and wrong on the facts.”
“There’s a lot of things to explain,” Canales said. “They’re going to want explanations and we’re going to give them explanations.”

The FBI has been investigating USA Now at least since April 2012, when an agent interviewed an unnamed investor from Mexico’s Nuevo León state, an FBI affidavit attached to the warrant says. None of the five investors listed in the affidavit are named to protect their identities because of Mexico’s drug violence, FBI Special Agent Benjamin LaBuz wrote.

That investor signed on with USA Now in August 2010, putting forward the $500,000 required under the EB-5 visa program to gain immigration status in the United States. Agents say Bebe Ramirez, owner and director of USA Now, moved the money into a separate account operated by Now Co. Loan Services — another company under her direction.

That same day, she wrote checks for a $6,500 down payment at Barrett Auto Gallery in McAllen, where a USA Now employee, David Perez, had obtained a Mercedes-Benz C330 sedan only days before, the affidavit says.

The investor was repaid $433,305 from another investor’s account in June 2011 — the definition of a Ponzi scheme, according to the warrant.

Other investors’ money went to other areas not covered by the EB-5 program, LaBuz wrote in the affidavit.

>> In April 2011, agents say a $500,000 payment went from the investor’s escrow account to the Bayou Grill — a North McAllen restaurant owned by Bebe Ramirez — leaving just $45 in the other bank account, the affidavit says. The same day, agents say Bebe Ramirez wrote a $485,000 check to Now Co. Loan Services, which then went to her lawyers to cover a civil lawsuit settlement.

>> Also in April 2011, agents say Bebe Ramirez took money from a Tamaulipas-based investor who had been told they were putting funds toward an oil and energy development project to pay $54,000 for a Mercedes-Benz GL550 sport utility vehicle in her name. Another $55,000 of the money went to Page Southerland Page, an engineering and consulting firm tasked with a project not approved by the investor, the affidavit states.

>> And a McAllen-based lawyer who is a U.S. citizen told the FBI that Marco Ramirez offered to help him buy back real estate previously lost to foreclosure only to have $50,000 of his $470,000 investment go toward a 2011 Dodge Ram 3500 pickup truck rather than real estate, the affidavit says.

Unlike drug cases prosecuted locally, where ill-gotten proceeds cannot be funneled in other investments, Canales argued that USA Now was within the law in how it placed Mexican investors’ money.

“Mr. Ramirez has nothing to hide and I don’t believe he’s done anything wrong in this business,” Canales said. “It’s a very technical business and we’ll be able to explain it.”

THE EB-5 PROGRAM

USA Now is one of more than 300 outfits nationwide that guide foreign investors to economic development projects in the United States that qualify under the EB-5 visa program, set up in 1990 to stimulate foreign investment in the United States.

Wealthy individuals seeking a fast track to permanent residency in the U.S. can skip past others seeking immigration status here by making a $500,000 investment in high-unemployment regions, like the McAllen metro area.

Qualifying projects must create 10 jobs in the United States within two years.
A video on USA Now’s website claims that people who put up the cash can obtain permanent residency in the United States in about 120 days. The company advertises throughout Mexico, where wealthy investors have come forward in recent years, eager to leave behind the surging drug violence that has gripped much of the country.

“Discover a new world of opportunity with excellent benefits,” an announcer says in Spanish. “USA Now — for you, for your family.”

In McAllen, one of USA Now’s most prominent development proposals was an $80 million, 22-story luxury condominium tower slated to go up north of Lowe’s at North 10th Street and Dove Avenue. The proposed development stalled after nearby residents in one of McAllen’s wealthiest neighborhoods opposed the deal.
Federal law caps the number of EB-5 visas at 10,000 annually. Records show more than 7,600 such visas were issued in the 2012 fiscal year — more than double from the year before.

But just because Mexicans haven’t been receiving as many visas as countries like China, Taiwan and South Korea doesn’t mean the EB-5 program hasn’t been lucrative locally.

In a 2011 interview, Marco Ramirez said USA Now had secured $83 million in commitments from Mexican investors and had ambitions to land 300 investors, or $150 million in commitments by the end of that year. He would not say where the money went, but said he offers funds for health care, property management and green energy projects.

In his efforts to expedite USA Now’s status as an EB-5 regional center that year, Marco Ramirez said he included letters from prospective investors he already had lined up, looking to flee the violence.

“Sometimes hope is the only thing that gets us through the day,” he said in a 2011 interview. “Their hope is to be in a place where they can sleep at night and hope tomorrow will be better.”

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